Aave’s governance process has come under intense scrutiny following a controversial proposal by Aave Labs regarding DAO ownership of the protocol’s brand assets. The move sparked strong opposition from contributors and long-time community members, who argue it undermines the principles of decentralization and DAO autonomy.
Tensions escalated just hours before the governance vote when a large holder offloaded approximately $38 million worth of AAVE tokens on-chain. The sudden sell-off sent shockwaves through the market, driving the token’s price down by nearly 10% in a short period.
The incident has exposed deep fractures within the Aave ecosystem, with critics questioning the transparency of the decision-making process and the level of respect shown toward the DAO and its contributors. As the vote proceeds, the outcome may set a critical precedent for governance, trust, and power dynamics within one of DeFi’s largest protocols.
