Aave community members and participants have become sharply divided in recent weeks over control of the protocol’s brand and associated assets, intensifying an ongoing dispute over the relationship between the decentralized autonomous organization (DAO) and Aave Labs, the centralized development company that builds much of Aave’s technology.
The debate has attracted considerable attention because it touches on a central issue facing many of crypto’s largest protocols: the tension between decentralized governance and the centralized teams that often drive execution. As protocols evolve and brands become more valuable, it becomes increasingly difficult to ignore the question of who ultimately controls these assets, the token holders or the builders.
The dispute was sparked by Aave’s integration of CoW Swap, a trade execution tool, which resulted in swap fees being transferred to Aave Labs rather than the DAO Treasury. While Labs claimed the revenue reflected development work at the interface level, critics said the deal exposed a deeper issue: who ultimately controls the Aave brand, which has more than $33 billion locked up in its network. This question is now at the heart of the debate over ownership of Aave’s brands, domains, social accounts and other brand assets.
Proponents of DAO control argue that the proposal would align governance rights with those who bear economic risk, limit unilateral control of a private company, and ensure that the Aave brand reflects a protocol governed and funded by token holders rather than a single builder. Those who support the laboratory take the position that removing control of the brand from manufacturers could slow development, complicate partnerships and blur responsibility for managing and promoting the protocol.
The proposal has deeply divided community members, with opponents and supporters offering very different visions for Aave’s future.
Laboratory assistance
Aave Labs supporters say the company’s continued control over the Aave brand and associated assets is critical to the protocol’s ability to execute and compete at scale. They say that the rise of Aave in DeFi is inseparable from the operational autonomy of the Labs.
“Something that deserves more weight in these discussions is how much of Aave’s success over the years is due to Aave Labs/Avara, and how difficult it is to run a real business as a DAO,” said Nader Dabit on X, a former Aave Labs employee. “DAOs are structurally incapable of delivering competitive software. Every product decision becomes a governance proposition, every pivot requires token holder consensus, and every rapidly evolving opportunity dies in a thread while competitors execute.”
From this perspective, front-end asset management by Aave Labs has enabled faster iteration, clearer accountability and smoother engagement with partners, particularly those in traditional finance who need identifiable legal counterparties. Supporters warn that shifting control of the brand to a DAO-managed legal entity could slow enforcement at a critical time.
KPMG’s George Djuric argued that forcing Aave Labs into a subsidy-dependent or tightly constrained operating model would risk turning builders into political players rather than product teams. Such a structure, he said, would stifle innovation by turning established developers into “politicians singing for their supper” with every funding round.
Other proponents also push back against claims that brand control amounts to economic extraction from the DAO. They note that protocol-level revenue remains entirely within the control of the DAO and that interface-level monetization – such as swap integrations – is intended to fund continued development that ultimately strengthens the protocol. In their view, the Labs’ work expands the overall economic pie, increasing the DAO’s long-term revenue potential rather than diminishing it.
An Aave Labs spokesperson did not respond to a request for comment at the time of publication.
Ownership of the DAO brand
Proponents of the DAO taking control of branded assets argue that the problem is not preventing private companies from creating products, but aligning ownership with the place of execution and revenue generation.
Marc Zeller, a longtime Aave contributor and founder of the Aave-Chan Initiative, said in an essay on Tuesday DAO proponents do not dispute that Aave Labs continues to create and maintain much of the protocol’s tools. Instead, they argue that ultimate control over upgrades, funding and risks has been transferred to governance, with the Labs operating as a core service provider alongside other contributors funded and overseen by the DAO. Problems arise when a private actor controls the storefront while the DAO ecosystem runs the engine.
Much of Aave’s growth over multiple market cycles comes from independent external service teams who help operate the system and keep it up to date – work that ultimately returns value to the DAO. If the brand and distribution remain under the control of a private entity, DAO supporters say token holders will not have influence over how Aave is represented, monetized, and run in the long term.
However, the concern is structural rather than personal, Zeller said: If ownership of branding and distribution remains outside the DAO, token holders have limited leverage over how the protocol is represented, monetized, or directed in the long term. The proposal argues that ownership of the DAO, with delegated management under enforceable terms, better reflects the current operation of Aave.
“The Aave DAO vs. Aave Labs situation is probably the most important live debate around token holder rights today,” investment partner Louis Thomazeau wrote on X, highlighting the dispute’s broader implications for token holder governance models. “This isn’t just about Aave token holders; it matters to all token holders who are watching this unfold with growing concern.”
“Stani is out of touch if he thinks we’re ‘tired’ of discussing token holder rights,” Messari Research Analyst Sam Rushkin added on X.
According to the latest results, around 58% of votes cast so far are against transferring ownership of Aave-related assets to the DAO, with around a third of voters abstaining. Voting is expected to end on Friday.
Read more: Aave drops 18% for the week as dispute drags token deeper than major crypto tokens
