A vote concerning control over brand assets was unilaterally submitted to the Snapshot platform by Aave Labs, with voting officially opening on December 23. Ernesto Boado, the original author of the proposal and former CTO of Aave, expressed strong indignation, stating that this move "violates all standards of trust between the community."
The controversy quickly spilled over into the market. Over the past weekend, the price of the AAVE token plunged by about 15%, making it one of the worst-performing assets among the top 50 cryptocurrencies by market cap. At the same time, Gate platform data shows that as of December 23, the AAVE/USDT spot price stood at $153.3, with a 24-hour decline of 4.5%.
01 Origins of the Dispute: From Fee Distribution to Governance Over Brand Ownership
Tensions within the Aave community have been brewing for some time. The seeds of this controversy were sown weeks ago, centering on the issue of revenue sharing after Aave Labs integrated CoW Swap into the application frontend.
Community members estimate that this integration, which was implemented without explicit DAO approval, may have diverted around $200,000 in weekly fees from the DAO treasury to private addresses controlled by Aave Labs, raising accusations of "stealth privatization."
In response to growing concerns, BGD Labs co-founder Ernesto Boado submitted a proposal on December 16 titled "ARFC $AAVE Token Alignment Phase 1: Ownership."
The core demand of this proposal is to formally transfer the legal ownership and control of Aave’s brand assets to AAVE token holders. These assets include domain names, social media accounts, naming rights, and the GitHub organization, which are currently managed by contributors such as Aave Labs.
02 "Surprise Vote": Procedural Disputes and Erosion of Community Trust
As the community engaged in heated debate over the proposal’s details, a dramatic turn occurred on December 22. Aave Labs unilaterally created a voting page for the proposal on Snapshot and announced that voting would officially open on December 23, running through December 26.
This move was widely seen as a "rushed escalation" and a "procedural ambush."
Ernesto Boado, the proposal’s original author, reacted sharply. On social media, he stated that Aave Labs had hurriedly submitted the proposal for voting while it was still under active discussion, without notifying him. He emphasized that had his opinion been sought, he would never have approved. Marc Zeller, founder of the Aave Chan Initiative, described the action as "a hostile takeover attempt initiated by the Labs."
The controversy centers not only on procedure but also timing. The vote was scheduled during the Christmas holiday, and community members pointed out that this could significantly reduce attention and participation, impacting the representativeness and legitimacy of the vote.
03 Market Reaction: Sharp Token Price Swings and Whale Movements
The governance dispute immediately impacted the market, triggering significant asset sell-offs. According to Nasdaq, AAVE’s price plummeted about 15% over the weekend, markedly underperforming the broader crypto market.
Meanwhile, on-chain data revealed unusual activity from major holders. On December 22, an AAVE whale address sold all 230,350 AAVE tokens in batches, swapping them for stETH and WBTC. This move resulted in a realized loss of roughly $13.45 million for the address, which the market interpreted as a large holder hedging against governance uncertainty.
Market sentiment became polarized. On one hand, whales were reducing their positions; on the other, founder Stani Kulechov recently increased his holdings by purchasing $10 million worth of AAVE tokens in the open market, signaling alignment with community interests.
As of December 23, circulating supply for AAVE stood at approximately 15.19 million tokens. Investors can closely monitor price movements of the AAVE/USDT trading pair on Gate and other leading exchanges to track the latest shifts in market sentiment.
04 Stakeholder Positions: Founder’s Defense and Divergent Community Voices
Facing mounting criticism, Aave founder Stani Kulechov issued an official response. On social platforms, he argued that the vote was "fully legal and in line with the governance framework."
He explained that the proposal had undergone five days of thorough discussion, and moving to the voting stage was meant to "clarify the next steps," adding that "voting is the ultimate governance mechanism to resolve issues."
However, key community voices such as the Aave Chan Initiative remained unconvinced. Marc Zeller pointedly noted that Aave Labs had escalated the proposal without resolving discussions, reaching clear consensus, or obtaining the original author’s consent.
He highlighted the recent emergence of new delegates with substantial voting power and the timing during a period of low engagement, which deepened the community’s perception that the vote was optimized for a specific outcome rather than legitimacy.
05 A Stable Platform: Gate’s Role and Opportunity Amid Volatility
During periods of market turbulence triggered by governance crises at individual projects, a deep, liquid, and secure trading platform becomes especially vital. As a global leader in crypto trading, Gate offers users such an environment.
According to its 2025 annual review, Gate’s global registered user base is approaching 50 million, with spot trading volume ranking second worldwide and derivatives trading volume in the top three globally. This scale and depth ensure users can trade assets like AAVE smoothly under all market conditions.
For traders tracking Aave governance developments, Gate not only provides real-time AAVE/USDT spot and perpetual contracts but also integrates the latest market information. The platform supports trading for over 4,100 crypto assets and was among the first to implement 100% proof of reserves, establishing a foundation of security and trust.
Additionally, Gate recently launched the "Perp DEX Year-End Trading Journey" event, featuring a prize pool totaling 20,000 USDT to encourage users to trade and engage with perpetual contracts and other products.
Outlook
As Aave founder Stani Kulechov insists on social media that "voting is the ultimate governance mechanism," AAVE holders are preparing to make their choice on Snapshot. Whatever the outcome, this rushed vote has already landed in the DeFi ecosystem like a stone thrown into a deep lake.
The market’s response has been clear and unforgiving: AAVE’s market cap has evaporated by nearly 15% amid the controversy. The community is left questioning whether DeFi governance’s gold standard is shifting away from transparent collective decision-making toward "compliant ambushes" orchestrated by core teams.
