Aave closed the year with a headline number few DeFi protocols can match: roughly $140 million in DAO revenue, more than what it earned over the previous three years combined. Yet instead of celebrating, the community spent the holiday period locked in a bitter governance dispute that has weighed heavily on the AAVE token and exposed deep tensions between Aave Labs and the DAO.
The flashpoint came during Christmas week, when an Aave Request for Comment (ARFC) proposed transferring key brand assets — including domains, trademarks and social media accounts — from Aave Labs into a DAO-controlled legal structure. The timing raised eyebrows. With many traders, delegates and institutional participants offline, critics described the move as rushed and poorly coordinated.
When the votes were counted, the proposal failed decisively. Around 55% voted against, while more than 41% abstained, signaling not just rejection but widespread reluctance to engage. Only a small fraction supported the transfer, underscoring how divided the community has become over who should control Aave’s off-chain identity.
Founder and CEO Stani Kulechov moved quickly to address the fallout. In a public statement on X, he acknowledged communication gaps and stressed that AAVE token holders already control the DAO’s growing treasury. He highlighted the $140 million revenue figure as critical context, emphasizing that these funds sit under DAO governance — not Aave Labs.
That message landed in a nervous market. Over the past week, AAVE has fallen roughly 20%, dropping from the high $180s to the mid-$140 range. Trading has been volatile, with thin liquidity amplifying sharp intraday moves. One large holder reportedly sold over 230,000 AAVE, worth about $37 million at the time, adding pressure and leaving a clear supply zone that traders now treat as resistance.
Fueling the controversy further was Kulechov’s $10–15 million purchase of AAVE tokens shortly before the vote. Critics labeled it a “governance attack,” arguing it boosted his voting power ahead of sensitive decisions. Kulechov pushed back, saying the tokens were not used to vote on the brand proposal and that the purchase reflected long-term conviction rather than tactical maneuvering.
Beyond branding, the dispute cuts to deeper economic questions. Some community members have raised concerns about recent frontend changes and whether portions of fee revenue are being routed away from the DAO. In that context, debates over logos and domains become proxies for a larger struggle over control, incentives and transparency.
For now, markets are treating governance risk as real risk. Funding rates on AAVE perpetuals have turned negative, while other DeFi tokens show relative strength. Traders are watching the $140–$142 price zone closely, viewing it as a critical area where demand last appeared.
Kulechov has promised clearer communication going forward, including a more detailed explanation of how Aave Labs’ products generate value for the DAO and AAVE holders. Whether that reassurance is enough remains to be seen. With revenues surging, tensions rising and another Snapshot vote always around the corner, Aave’s governance experiment has entered a high-stakes phase — and the market is paying close attention.
Also Read: XRP Hovers at $1.80 as Weak Momentum Puts Price Under Pressure
