What you need to know: Aave’s community members and participants have become sharply divided in the debate over control of the protocol’s brand and related assets, further intensifying the ongoing controversy over the relationship between the decentralized autonomous organization (DAO) and Aave Labs. This debate has attracted widespread attention because it touches on a core issue faced by many of the largest crypto protocols: the tension between decentralized governance and the centralized teams that often drive execution.
In recent weeks, Aave’s community members and participants have become sharply divided over the issue of control of the protocol’s brand and related assets, further intensifying the ongoing controversy over the relationship between the DAO and Aave Labs, the centralized development company responsible for building most of Aave’s technology.
This debate has drawn widespread attention because it touches on a core issue faced by many of the largest crypto protocols: the tension between decentralized governance and the centralized teams that often drive execution. As protocols expand and brand value accumulates, the question of who ultimately controls these assets—token holders or developers—becomes increasingly difficult to ignore.
The controversy was sparked by Aave’s integration with CoW Swap, a trade execution tool that resulted in swap fees flowing to Aave Labs instead of the DAO treasury. While Labs argued that this revenue reflects interface-level development work, critics say the arrangement exposes a deeper issue: who ultimately controls the Aave brand, which has over $33 billions locked in its network. This question is now at the heart of the debate over ownership of Aave’s trademarks, domain names, social accounts, and other brand assets.
Proponents of DAO control argue that the proposal aligns governance rights with those who bear economic risk, limits unilateral control by private companies, and ensures that the Aave brand reflects a protocol governed and funded by token holders rather than a single developer. Those supporting Labs’ ownership counter that stripping developers of brand control could slow development, complicate partnerships, and blur responsibility for protocol operations and promotion.
The proposal has sparked deep divisions among community members, with opponents and supporters presenting starkly different visions for Aave’s future.
Labs Support
Supporters of Aave Labs argue that the company’s continued control of the Aave brand and related assets is crucial for the protocol’s ability to execute and compete at scale. They say Aave’s rise in DeFi is inseparable from Labs’ operational autonomy.
“What deserves more attention in these discussions is how much of Aave’s success over the years is due to Aave Labs/Avara, and how challenging it is for a DAO to operate as an actual company,” former Aave Labs employee Nader Dabit said on X. “DAOs are structurally incapable of delivering competitive software. Every product decision becomes a governance proposal, every shift requires token holder consensus, and every fast-moving opportunity dies in forum discussions while competitors execute.”
From this perspective, Aave Labs’ management of front-end assets enables faster iteration, clearer accountability, and smoother interactions with partners—especially traditional financial institutions that require a recognizable legal counterparty. Supporters warn that transferring brand control to a DAO-operated legal entity could slow execution at critical moments.
George Djuric of KPMG argues that forcing Aave Labs into a grant-dependent or tightly restricted operating model risks turning builders into political actors rather than product teams. He says this structure would stifle innovation by turning proven developers into “politicians singing for their supper” in every funding cycle.
Other supporters also reject the idea that brand control equates to economic extraction from the DAO. They point out that protocol-level revenue remains entirely under DAO control, while interface-level monetization—such as swap integrations—is intended to fund ongoing development and ultimately enhance the protocol. In their view, Labs’ work expands the overall economic pie, increasing the DAO’s long-term profit potential rather than reducing it.
Aave Labs’ spokesperson did not respond to a request for comment by press time.
DAO Brand Ownership
Those supporting DAO control of brand assets argue that the issue is not about stopping private companies from building products, but about aligning ownership with where execution and revenue generation actually occur.
Longtime Aave contributor and Aave-Chan Initiative founder Marc Zeller said in an X post on Tuesday that the DAO has become the engine for maintaining risk, shipping upgrades, and generating recurring revenue, while brand assets serve as the storefront. DAO supporters do not deny that Aave Labs continues to build and maintain most of the protocol’s tools. Instead, they argue that ultimate control over upgrades, funding, and risk has shifted to governance, with Labs operating as a core service provider alongside other contributors funded and overseen by the DAO. The problem arises when a private actor controls the storefront while the DAO ecosystem keeps the engine running.
Much of Aave’s growth over multiple market cycles has come from independent service teams that help run the system and keep it up to date—work that ultimately returns value to the DAO. If brand and distribution remain controlled by a private entity, DAO supporters say, token holders will lack leverage over Aave’s long-term performance, monetization, and direction.
However, Zeller says the focus is structural, not personal. If ownership of brand and distribution remains outside the DAO, token holders will have limited leverage over the protocol’s performance, monetization, or long-term direction. The proposal argues for DAO ownership, with delegated management under enforceable terms, as a better reflection of how Aave operates today.
“Today, the situation between Aave DAO and Aave Labs may be the most important real-time debate about token holder rights,” investment partner Louis Thomazeau wrote on X, highlighting the broader implications of the controversy for token holder governance models. “This isn’t just about Aave token holders; it’s important for all token holders watching this play out and growing increasingly concerned.”
“If Stani thinks we’re ‘tired’ of discussing token holder rights, he’s out of touch with reality,” Messari research analyst Sam Rushkin added on X.
According to the latest results, about 58% of votes so far oppose transferring ownership of Aave-related assets to the DAO, with about a third of voters abstaining. Voting is scheduled to end on Friday.
Read more: Aave falls 18% amid controversy, its token dropping more than major crypto tokens
