Second Largest Whale Cuts Losses and Liquidates, Can AAVE Still Be Bought Amid Deepening Divisions?
The second-largest AAVE whale, excluding the project team, protocol contracts, and CEXs, has sold 230,000 AAVE tokens at a significant loss of $13.45 million, causing a 12% price drop. This sell-off reflects growing tensions between Aave Labs and the community over governance and fund allocation.
The conflict began when Aave switched its default swap aggregator to Cow Swap, redirecting front-end transaction fees—previously sent to the Aave DAO treasury—to Aave Labs instead. Community members estimated this change could divert over $10 million annually from the DAO to the team, raising concerns about transparency and control.
Aave Labs argued that front-end products are separate from the protocol and that the team has the right to monetize them. In response, a proposal was made to transfer control of Aave’s brand assets (domains, social accounts, etc.) to token holders. Founder Stani Kulechov opposed the proposal, citing its oversimplification of complex legal and operational issues, further escalating community backlash.
The situation highlights deeper structural challenges in DeFi governance, where protocol value, team control, and community rights intersect. The outcome of an ongoing snapshot vote on the proposal may determine AAVE’s short-term price direction and long-term community trust. If the conflict signals fundamental misalignment between Aave Labs and the DAO, this could mark the start of continued tension rather than an isolated incident.
marsbit12/22 04:13
