A public conflict is unfolding in the Aave ecosystem between the DAO and Aave Labs regarding the division of control and revenues. The story began when Aave Labs developed the product and launched the Decentralized Autonomous Organization, which took control over the protocol's smart contracts and governance. Meanwhile, protocol revenues flow into the DAO treasury, but part of the infrastructure and the brand remain under Labs' control.
Causes of the Conflict Between Aave DAO and Aave Labs
Disagreements arose over which ecosystem elements each party controls and how value is distributed between them. Aave Labs retained the frontend and technical base, manages interface code, internal services, the brand, and the mobile app, whereas the core protocol and its revenues formally belong to the DAO. This division of functions and incentives has created tension between the community and the developer.
- Separation of control over the protocol and infrastructure.
- Creation of the Horizon structure for additional brand monetization.
- Change in fee routing: replacing Paraswap with Cowswap and redistributing about $10 million in annual fees.
DAO's Proposal to Resolve the Conflict
In response, the DAO prepared a proposal aimed at returning some governance elements under direct community control. The document calls for transferring rights to the brand, intellectual property, domains, and interfaces back to the DAO. The goal is to align incentive mechanisms between the DAO and the teams developing the infrastructure.
- Return of control over the brand and IP rights.
- Transfer of domains and user interfaces, including the frontend and mobile app.
- Alignment of incentives between the DAO and development teams.
Significance of the Vote and Possible Outcomes
The vote on the proposal will begin soon and will serve as a public decision point on the disputed issues. Its outcome could set a precedent regarding how DAOs interact with developer teams and who controls key ecosystem elements. Discussions also link these issues to the overall Aave ecosystem and the AAVE token price.
The current AAVE price is noted as approximately $151.26, providing context for the governance debate within the ecosystem.
Why This Matters
For users and token holders, this conflict touches on ownership rights over the brand and interfaces through which they interact with the protocol. Control over the frontend and fee routing affects which services and fees are used in the community interfaces, influencing revenue distribution within the ecosystem. Consequently, the resolution of this dispute could change the governance structure and economic benefit allocation around Aave.
What Should You Do?
If you use the Aave protocol or hold AAVE tokens, it’s helpful to follow simple observation and security practices. First, monitor the voting process and read the proposal text to understand which rights and services are being discussed.
- Regularly check official DAO sources before interacting with interfaces and applications.
- When possible, use verified client applications and verify which addresses and services are used for fees and swaps.
- Keep your keys and accounts securely stored and avoid switching to new interfaces without verification.
- If you operate a small setup, it’s sufficient to stay informed and avoid changing mining processes based on conflict rumors.
Summary
The conflict between Aave DAO and Aave Labs centers on the division of control over the protocol and infrastructure, creation of additional monetization channels by Labs, and redistribution of some fees. The DAO has proposed returning the brand, IP, domains, and interfaces under community management, with voting to start soon. These developments are important for all ecosystem participants as they concern ownership rights and revenue distribution.
