Circle and Aave Reveal the Underlying Reality of Token Holders
Behind the glamorous governance narrative in the cryptocurrency world, the rights of token holders are repeatedly sacrificed by a brutal capital structure and ambiguous boundaries of responsibility.
In December 2025, stablecoin giant Circle announced the acquisition of the core development team Interop Labs from the cross-chain protocol Axelar, but explicitly excluded the Axelar network, foundation, and AXL token. This “people over tokens” acquisition immediately led to a 15% drop in AXL token price, sparking intense debate in the crypto community about the rights associated with tokens and equity.
Almost simultaneously, DeFi leader Aave erupted in internal conflict, with Aave Labs accused of directing fees generated from the front-end integration of CoW Swap to private addresses, rather than to the Aave DAO treasury, potentially causing the DAO a loss of about $10 million in revenue each year. This incident led to a continuous decline in AAVE token prices, with a drop of over 12% within a week.
The two events seem independent yet point to a harsh reality: in the current structure of the crypto industry, token holders often find themselves at the bottom of the capital structure.
The core conflict raised by these two events is: how should tokens be defined in legal and economic structures?
There exists a common contradiction in the industry: when the prospects are bright, tokens are assumed to be “quasi-equity,” endowed with claims to future success; but in real scenarios such as mergers, bankruptcies, and liquidations, they are quickly reverted to their original form of “rights-less certificates.”
Zach Rynes, a prominent figure in the ChainLink community, pointed out: “This once again exposes the conflict between tokens and equity interests that plagues the crypto industry. The development team behind the protocol was successfully acquired, yet the token holders who funded that team received nothing in return.”
From Circle’s “people over tokens” to Aave’s revenue distribution controversy, all point to the same conclusion: token holders often find themselves at the bottom of the capital structure. As the crypto world moves from the fringes to the mainstream, the balance of rights between tokens and equity will become an unavoidable institutional issue.
