Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
The leading lending protocol Aave is embroiled in a public opinion storm, with the conflict between the team and the community intensifying, which has objectively shaken the confidence of token holders in the AAVE token itself.
In the early hours of today, the second-largest AAVE holding whale, excluding the project team, protocol contracts, and CEXs, cut losses and liquidated 230,000 AAVE (worth approximately $38 million), causing AAVE to drop 12% short-term. It is reported that this "number two big brother" purchased the AAVE holdings from late last year to early this year at an average price of $223.4. The average selling price today was about $165, resulting in a final loss of $13.45 million.
- Odaily Note: The whale address is https://debank.com/profile/0xa923b13270f8622b5d5960634200dc4302b7611e.
Origin of the Incident: Fee Flow Dispute
To understand the current community crisis at Aave, we need to start with a recent change to the Aave frontend.
On December 4th, Aave announced a partnership with Cow Swap, adopting the latter as the default trading path for the swap function on the Aave frontend (Odaily Note: previously it was ParaSwap), utilizing its anti-MEV features for better quotes.
This seemed like a normal functional upgrade, but the community soon discovered that the additional fees generated by this function (including referral fees or positive slippage surplus fees), which previously flowed to the Aave DAO treasury address when using ParaSwap, were now being directed to the Aave Labs address after switching to Cow Swap.
Community representative EzR3aL was the first to notice this change, which Aave had not actively mentioned. They questioned the Aave team in the governance forum and estimated that, just tracking the income flow on Ethereum and Arbitrum, this fee change could generate around $200,000 in weekly revenue, corresponding to an annualized income of over $10 million — this meant Aave had redirected at least tens of millions of dollars in revenue from the community address to the team address, seemingly without anyone knowing.
Core Controversy: Who Really Owns the Aave Brand?
As EzR3aL's post gained traction, a large number of AAVE holders felt betrayed, especially considering that Aave made this change without communicating with the community or making any disclosure, somewhat hinting at an intention to conceal this alteration.
In response to community质疑 (queries/doubts), Aave Labs replied directly under EzR3aL's post, stating that there should be a clear distinction between the protocol layer and the product layer. The swap function interface on the Aave frontend is entirely operated by Aave Labs, which is responsible for capital investment, construction, and maintenance. This function is completely independent of the DAO-managed protocol. Therefore, Aave Labs has the right to independently decide how to operate and profit from it... The income previously flowing to the Aave DAO address was a donation from Aave Labs, but it was not an obligation.
In short, Aave Labs' stance is that the frontend interface and its ancillary functions essentially belong to the team's product, and the revenue generated should also be regarded as company property, not to be confused with the protocol and related income controlled by the DAO.
This statement quickly sparked heated discussion within the community regarding the ownership of the Aave protocol versus its products. A well-known DeFi analyst wrote an article titled "Who Really Owns 'Aave'?: Aave Labs vs Aave DAO". Odaily Planet Daily also published a Chinese translation, which can be read for further context.
On December 16th, the矛盾 (contradiction/conflict) was further intensified. Former Aave CTO Ernesto Boado initiated a proposal in the governance forum requesting the control of Aave brand assets (including domain names, social media accounts, naming rights, etc.) be transferred to AAVE token holders. The relevant assets would be managed through a DAO-controlled entity (the specific form to be determined later) with strict anti-encroachment protection mechanisms.
The proposal received nearly ten thousand views and hundreds of high-quality replies within the Aave governance forum. Various participants in the Aave ecosystem expressed their positions in the comments below the proposal. Although some voices believed the proposal's execution plan was insufficient and risked exacerbating the conflict, most replies expressed support.
Founder's Statement, But Community Unconvinced
As community sentiment heated up, Aave founder Stani responded in the forum: "...This proposal leads us in a direction unfavorable to the Aave ecosystem. It attempts to force a complex legal and operational issue into a simple 'yes/no' vote without providing a clear execution path. Handling such a complex issue should involve a specially designed structured process, achieving consensus through multiple interim checks accompanied by specific solutions. For the reasons above, I will vote against this proposal..."
From a business operations perspective, Stani's claim that the proposal is too rash might not be wrong. However, in the current discussion atmosphere, this statement can easily be interpreted as 'the Aave founder disagrees with transferring brand assets to token holders,' which obviously further intensified the conflict between the community and the team.
After Stani's statement, even some attacking remarks against Stani appeared in the original post's comments. More users expressed their dissatisfaction via the forum or social media. An OG user mentioned it was the first time he considered liquidating his AAVE holdings. A loyal AAVE believer stated: "AAVE holders should realize this is just another DeFi shitcoin. It's neither better nor worse than the others."
The latest community development is the one mentioned at the beginning of this article: the number two big brother cutting losses and exiting with a loss exceeding ten million dollars.
Can AAVE Still Be Bought?
Just two weeks ago, Odaily Planet Daily wrote an article titled "What Did the Smart Money Aggressively Buying AAVE at Lows See?". At that time, AAVE was still a favorite of top institutions like Multicoin Capital. Its优质 (high-quality) brand reputation, substantial locked funds, clear expansion path, and strong revenue and buyback flow all proved that AAVE was a 'true value token' different from other altcoins.
But in just two weeks, a舆论危机 (public opinion crisis) spanning from fee ownership to brand control and then to team-community relations has rapidly plunged AAVE from a "representative of value tokens" into the center of controversy, even landing it on the short-term top decliners list due to emotional impact.
As of writing, Aave Labs has stated below Ernesto's proposal that they have initiated an ARFC snapshot vote on the proposal, allowing AAVE token holders to formally express their stance and clarify the future direction. The outcome of this vote and the subsequent handling attitude of the Aave Labs team will undoubtedly significantly impact Aave community faith and the short-term price performance of AAVE.
It is important to emphasize that this incident is not merely "negative news" or "performance change," but a集中拷问 (concentrated interrogation) of Aave's existing governance structure and boundaries of rights.
If you believe that Aave Labs will still maintain high alignment with Aave DAO's long-term interests, and the current friction is more of a communication and process失误 (mistake), then the price pullback led by emotions might be a good entry window; but if you think this controversy exposes not an occasional problem, but a structural contradiction of long-term unclear rights between the team and the protocol, lacking institutional constraints, then this storm might just be the beginning.
From a broader perspective, Aave's controversy is not an isolated case. As DeFi matures, protocol revenue becomes genuinely considerable, and brands and frontends begin to possess commercial value, some inherent structural contradictions between protocols and products, teams and communities will surface. Aave is pushed into the spotlight this time not because it erred more, but because it has gone further.
This debate over fees, brand, and control rights poses a question that needs answering not just by AAVE, but is an inevitable question the entire DeFi industry must eventually face.
