All hell broke loose in the Aave world last week.
The cryptocurrency community surrounding Aave experienced significant turmoil as its founder, Stani Kulechov, found himself at odds with many stakeholders after allegations surfaced that his company was attempting to “privatise” revenue that had previously been allocated to the Aave decentralized autonomous organization (DAO). Within the DAO’s forum, a unified sentiment emerged against Kulechov and Aave Labs, with the most vocal critics being Marc Zeller, founder of the Aave Chan Initiative, and the pseudonymous Ezr3al, the DAO’s largest delegate. This confrontation highlighted a surprising rift between the protocol’s creators and the community leaders entrusted with its governance.
### Tensions in Governance and Decentralization
The discord illustrated the challenges faced by crypto developers striving for decentralization, which involves transitioning their projects from private enterprises to community-owned entities. The situation escalated on December 11, when Ezr3al posted a critical review in the DAO forum regarding a recent partnership announcement from Aave Labs. The firm had revealed a collaboration with CoWSwap aimed at enhancing the swap functionality on its interface, which serves as a user-friendly gateway for non-technical investors to access the Aave protocol.
### Revenue Streams Under Scrutiny
However, the controversy arose because the interface already incorporated a revenue-generating swap feature that was beneficial to the DAO. In contrast, the revenue from the new CoWSwap arrangement would be directed to Aave Labs. Compounding the issue, the previous swap provider, Velora (formerly known as Paraswap), had generated approximately $1.1 million in revenue for the DAO in 2025, while the revenue from the CoWSwap integration was projected to exceed $10 million on an annual basis, according to Ezr3al. He condemned this move as an unjustifiable attempt to monetize the Aave brand, which had recently undergone a visual rebranding funded by the DAO.
### Aave Labs’ Defense
In response, Aave Labs defended its actions within the forum, asserting that while it does not control the Aave protocol—governed by AAVE token holders—it does maintain ownership of the interface. The company argued that charging a fee for swaps, a feature not present at the protocol level, is a reasonable approach to cover operational costs. Additionally, Aave Labs pointed out that the DAO could establish its own interface if that was the desired direction.
### Community Response and Allegations
Zeller then entered the discussion, employing his characteristic directness. He argued that Aave Labs and any service providers engaged by the DAO have a fiduciary responsibility to the cooperative. Zeller posited that there was an implicit agreement between the DAO and Aave Labs: while the DAO permits the use of the Aave brand, Aave Labs is expected to direct interface revenue back to the DAO. “It appears we have misjudged this alignment,” he noted, acknowledging a shift in understanding.
Kulechov countered that the DAO had only received the original revenue stream due to “regulatory uncertainty” and that there was no inherent obligation to do so. He dismissed the notion that Aave Labs owed a fiduciary duty to the DAO as “nonsense.”
### Proposals for Resolution
This clash has sparked at least three proposals within the Aave DAO forum. One proposal suggests that the DAO acquire a competing platform, Spark. Another, dubbed the “poison pill,” aims to initiate legal action against Aave Labs for complete ownership of all code, intellectual property, brand assets, and all prior revenue accrued from Aave-branded offerings. A third proposal seeks to gain control over Aave brand assets, including social media accounts. While the first two proposals may not gain traction, they underscore the significant unrest triggered by this incident, with the DAO actively seeking resolutions.
### Seeking Clarity on Ownership
Zeller expressed a pressing question regarding the ownership of the AAVE token, asking, “When you own $AAVE, what do you actually own?” He suggested that the upcoming weeks will be crucial in providing clarity on this strategic issue.
### Top DeFi Stories of the Week
In other DeFi governance news, the Arbitrum DAO has voted to implement the Fusaka upgrade, while the Compound DAO has approved an upgrade to its incentive program. Additionally, the Lido DAO is currently voting on its goals for 2026.
### Posts of the Week
This week, two posts have caught attention. One humorous remark notes, “Stop laughing at kids for believing in Santa. I know adults who still think NFTs will come back,” shared by Caitlin Cook. Similarly, Zack Voell echoed this sentiment, humorously pointing out, “Stop laughing at kids for believing in Santa. I know adults who still own Cardano.”
