Aave is closing the year with a paradox. On one hand, the protocol’s DAO has posted its strongest financial performance ever. On the other, a heated governance dispute between Aave Labs and the DAO has rattled token holders and sent AAVE’s price sharply lower.
According to Aave founder and CEO Stani Kulechov, the DAO generated around $140 million in revenue this year, a figure that exceeds the combined revenue of the previous three years. Importantly, control of those funds sits firmly with AAVE token holders. Yet instead of celebrating the milestone, the community has spent the holidays locked in a public fight over governance power, brand ownership, and trust.
The latest flashpoint was a proposal to transfer Aave’s core brand assets — including domains, trademarks, and social media accounts — from Aave Labs to a DAO-controlled legal entity. The vote failed decisively. More than 55% voted against the proposal, while over 41% abstained, highlighting deep divisions within the community rather than broad support for either side.
The timing didn’t help. The proposal landed during Christmas week, when trading desks across Europe were running on minimal staff and many large token holders were inactive. Critics described the move as aggressive and poorly timed, arguing that such a significant decision should not be pushed during a low-participation period.
As governance tensions escalated, the market reacted swiftly. AAVE has fallen roughly 20% in a week, sliding from the high $180s toward the mid-$140 range. Trading has been volatile, with sharp intraday moves and thin liquidity above $155. One large holder reportedly sold more than 230,000 AAVE tokens, worth about $37 million at the time, adding to selling pressure and leaving traders wary of overhead supply.
Fueling the controversy further was Kulechov’s recent purchase of an estimated $10–15 million worth of AAVE tokens. Some community members labeled the buy a “governance attack,” suggesting it boosted voting power ahead of sensitive decisions. Kulechov strongly rejected that claim, stating the tokens were not used in the brand-control vote and emphasizing that the purchase was a personal investment, not a governance maneuver.
Beyond branding, the conflict taps into larger concerns about economics and control. Several community members have raised alarms over recent frontend and interface changes, arguing that some revenue streams may be bypassing the DAO. That narrative has sharpened scrutiny of how value flows between Aave Labs’ development work and DAO-owned infrastructure.
Kulechov has acknowledged the communication breakdown. In a post on X, he said Aave Labs needs to do a better job explaining how its products create value for the DAO and AAVE holders. He framed the $140 million revenue figure as missing context — proof that the DAO already holds significant economic power, regardless of who controls off-chain brand assets.
For now, markets remain cautious. Funding rates on AAVE perpetuals have turned negative, and traders are closely watching the $140–$142 range as a key support zone. Until governance clarity improves, Aave’s strong fundamentals are taking a back seat to uncertainty.
The next Snapshot vote may be pivotal. With trust shaken and alignment under scrutiny, Aave’s governance experiment has entered a high-stakes phase — and both token holders and traders are watching closely.
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