Recently, the Aave community has been embroiled in a controversy over governance concerning the attribution of commercial revenue from the frontend, which has triggered a renewed discussion on governance structure and business boundaries. In this governance dispute, after the development entity Aave Labs integrated CoW Swap into the application frontend, the new fees generated from related transactions flowed directly to an address controlled by Labs. This sparked community concerns over revenue transparency, the attribution of brand assets, and the boundaries of governance rights. In response to this issue, the community formally proposed the ARFC proposal, with the core demand being to clarify the governance attribution of Aave's brand assets, requiring that intangible assets such as domain names, social media accounts, and the brand itself be uniformly transferred to DAO management. The proposal has now entered the Snapshot voting stage, with the voting window open from December 23, 2025, to December 26, 2025. Current voting results show approximately 494,800 votes against, accounting for 64.15% of the total. From the structure of the staged voting, there remains a clear divergence within the community regarding the direct transfer of brand assets to DAO control. The final outcome of this governance process will significantly impact how Aave establishes a stable balancing mechanism in the future between incentivizing the core development team, controlling the brand, and safeguarding the long-term interests of token holders.
1. Project Introduction
Aave is one of the largest and most mature decentralized lending protocols currently. After years of iteration, Aave's TVL has exceeded $33 billion, capturing about 60% of the market share in the DeFi lending market. Its core value lies not in a single lending product but in building a non-custodial, permissionless on-chain liquidity market. In December 2025, the U.S. SEC formally concluded its multi-year investigation into Aave without taking enforcement action. This development alleviated compliance uncertainties and also facilitated Aave's evolution from a DeFi protocol primarily serving crypto-native users to an on-chain financial infrastructure with stronger compatibility. It set a positive precedent for the overall compliance expectations of DeFi. Aave founder Stani Kulechov recently outlined its three major strategies for 2026: first, the comprehensive rollout of Aave V4, which aims to unify cross-chain liquidity through a Hub-Spoke architecture to break down capital barriers between different public chains; second, the scaled expansion of Horizon RWA—Horizon's net deposits have already reached $550 million, with plans to introduce global asset classes such as U.S. Treasury bonds, ETFs, and commodities on-chain through partnerships with institutions like Circle, Ripple, and Franklin Templeton, targeting a scale exceeding $1 billion in 2026; third, the full promotion of the Aave App,致力于将复杂的借贷操作转化为移动端储蓄应用 (committed to transforming complex lending operations into a mobile savings application).
2. Market Dynamics
There is currently a clear divergence within the Aave community regarding the ARFC governance proposal, which has quickly attracted market attention. This proposal was put forward by the former CTO of Aave Labs and current co-founder of BGD Labs. It aims to systematically clarify the governance attribution of Aave's intangible assets, requiring that core assets including domain names, official social media accounts, code repositories, and the naming rights to the "Aave" brand be uniformly placed under the management of the Aave DAO. The immediate background for this proposal is the community's questioning of arrangements concerning the control of certain protocol fees and brand assets that were not authorized by the DAO. This led to commercial revenue from the protocol not being effectively fed back into the token system, which some holders view as weakening the value of the AAVE token. This issue has sparked ongoing discussions in the governance forum. On December 22, before the community discussion had fully converged, the proposal was directly advanced to a Snapshot off-chain vote, with the voting period set from December 23 to December 26. As the voting window coincides with the Christmas holiday, several governance participants have raised objections to the process arrangement, believing it could affect token holder participation and the quality of deliberative governance.
Judging from the current voting progress and market feedback, this governance event has already had a tangible impact on short-term sentiment. As of now, there are approximately 494,800 votes against (64.15%), 253,400 abstentions (32.85%), and 23,200 votes in favor (3.01%), indicating significant community divergence on whether brand assets should be directly transferred to DAO control. During the voting process, clear risk-averse actions have also appeared on-chain. On December 22, a long-term AAVE-holding whale address sold its holdings of 230,000 AAVE in batches, converting the funds into stETH and WBTC. The price of AAVE corrected by about 10% in a short time, hitting a low of $156. However, the market generally interprets this sell-off as a temporary risk aversion due to governance uncertainty, rather than a denial of Aave's protocol fundamentals or long-term competitiveness.
3. Team Background
Aave originated in 2017. Its founder and CEO, Stani Kulechov, is one of the earlier entrepreneurs in the DeFi space to systematically build on-chain financial infrastructure. Stani has extensive entrepreneurial experience in the crypto and fintech sectors and has long been active in DeFi ecosystem development. At multiple critical junctures, he has articulated the protocol's long-term positioning and development strategy, including the V4 architecture upgrade, building institutional-grade lending capabilities, the direction of RWA integration, and the layout of application layers for a broader user base.
On the execution side, the protocol's technical R&D and product advancement are primarily undertaken by Aave Labs. This entity is responsible for the development, upgrading, testing, and ecological expansion of core contracts, emphasizing open-source, modularity, and composability in its design philosophy. Meanwhile, Aave's governance and strategic direction are not unilaterally decided by Labs but are coordinated and adjudicated by the Aave DAO as the main governance body through on-chain and off-chain governance processes. The Aave DAO, composed of token holders, is responsible for voting on major parameter adjustments, fund usage, protocol upgrade directions, and brand-related matters. Regarding the division of labor and boundaries of authority between the Aave DAO, Aave Labs, and the broader community, the protocol has formed an operational framework with the DAO as the governance body and Aave Labs as the execution body. The recent ARFC proposal is precisely a governance discussion unfolding around certain asset and authorization issues within this framework.
4. Token Information
Aave's native token, AAVE, has a total supply of 16 million tokens. The current circulating supply is approximately 15.19 million tokens, nearing the upper limit with limited room for new inflation, resulting in a relatively stable token supply structure. In this context, the value of AAVE depends more on its functional positioning in governance, risk-bearing, and protocol cash flow distribution. In terms of governance, AAVE is the core governance token of the Aave DAO, allowing holders to participate in the discussion and voting of proposals, including ARFC. Regarding risk and revenue mechanisms, AAVE fulfills the function of bearing systemic protocol risk through the Safety Module. According to the latest development direction, Aave is advancing the Umbrella module upgrade, introducing a more refined risk pricing mechanism. This allows stakers, while providing security backing for the protocol, to potentially share in the interest or fee income generated from the V4 architecture and RWA-related businesses. Furthermore, in terms of value capture, Aave has begun routinely executing a "buyback and distribute" strategy. This involves the protocol using a portion of the net income generated from lending businesses to repurchase AAVE on the secondary market and distribute it to protocol contributors and staking participants, establishing a more direct linkage between token value and the protocol's real cash flow.
5. Competitive Landscape
Aave has long been regarded as one of the representative protocols in the DeFi space with a relatively mature governance structure and high execution efficiency. However, as the protocol's scale, brand influence, and commercial demands continue to expand, the organizational complexity borne by its governance framework has increased, gradually revealing structural tensions in the original model. On one hand, the protocol's value highly depends on the consensus foundation, TVL, and network effects formed by the DAO community. On the other hand, crucial matters such as frontend operations, product iteration, compliance exploration, and institutional cooperation still heavily rely on the centralized decision-making and execution capabilities of a professional team at critical junctures. This structure, which combines decentralized governance with centralized execution, places higher demands on the existing boundaries of authority and responsibility as the protocol enters a mature stage. However, judging from the results reflected in the current governance vote, opposing opinions dominate, with abstentions accounting for 32.85%. This indicates that the community does not fully endorse addressing the attribution of frontend commercial revenue and brand assets through a relatively hasty, one-off structural adjustment in governance.
From a competitive landscape perspective, Aave's current governance controversy contrasts with Uniswap's recent governance progress regarding protocol revenue and token value capture mechanisms. Uniswap has advanced the activation of the protocol fee switch through the UNIfication proposal. After DAO approval, a portion of the transaction fees will be redirected into the protocol system for the continuous burning of UNI tokens, alongside a one-time treasury token burn. This mechanism directly links UNI's economic value to Uniswap's actual trading volume and fee income. The related fee ratios, burning paths, and execution methods were all determined through the governance process, also maintaining alignment between the team's and the community's interests. On a more fundamental level, this is not an isolated incident but rather different approaches taken by leading DeFi protocols at the scaling stage regarding token economics and protocol operations. If Aave can form an equally clear, executable, and institutionally binding governance and revenue arrangement through the current博弈 (game theory/negotiation), its competitive advantage is expected to be further consolidated. Conversely, if governance分歧 (divergence) remains in a state of unclear authority and responsibility for a long time, even if it maintains a lead in technology and liquidity, the uncertainty at the organizational and institutional levels could gradually turn into a competitive disadvantage.
