Aave DAO Faces Sovereignty Showdown Over Control of Protocol

A renewed governance dispute has surfaced within Aave after a DAO participant proposed a fundamental restructuring of the protocol’s relationship with Aave Labs. The proposal would shift ownership of Aave’s intellectual property, branding, and corporate equity from Aave Labs to the DAO that governs the protocol.

The initiative, authored by a contributor known as tulipking, argues that recent decisions by Aave Labs indicate a shift towards operating Aave as a private enterprise rather than a DAO-governed protocol. At the centre of the proposal is a legal “poison pill” strategy intended to reclaim control for AAVE token holders.

Tulipking pointed to the redirection of front-end swap fees following the CoW Swap integration as evidence of a unilateral move that bypassed DAO approval. The proposal contends that monetising the Aave brand, frontend, and user base without governance consent amounts to the effective privatisation of community-owned assets.

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Legal and Structural Demands

In response, the plan advocates initiating legal proceedings to transfer all Aave-related code, documentation, trademarks, and intellectual property to the DAO. It also seeks to claim full ownership of Aave Labs’ equity, effectively converting the company into a DAO-controlled subsidiary.

The proposal extends further by calling for the recovery of all historical revenue generated from Aave-branded products, with reclaimed funds directed to the DAO treasury. Additional measures include freezing DAO funding to Aave Labs and appointing a committee to oversee the legal and operational transition.

Tulipking characterised the proposal as deliberately extreme, framing it as a mechanism to force alignment with DAO governance or a complete separation. The dispute highlights persistent tensions within decentralised governance, particularly around revenue allocation, tokenholder rights, and the balance of power between DAOs and affiliated companies.

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