The Accumulation of Power in AAVE: What Do the $10M of the Founder Reveal About Vote Centralization?

The recent purchase of $10 million in AAVE by Stani Kulechov, founder of Aave, has reignited the debate over voting power concentration in decentralized governance. This move is not merely a financial investment but represents a turning point in how influence is distributed within the DAO community.

The Issue of Power Concentration

On-chain data is concerning: the top ten voters control over 46% of AAVE’s total liquidity, according to recent analysis. With a current price of $154.93 and a market capitalization of $2.35B, the founder’s purchase amplifies this power gap. Critics argue that when the three largest holders possess more than 58% of voting power, the very premise of decentralized governance is compromised.

Fast Track Reclaim and the Risks of Biased Voting

The controversy intensifies considering accelerated proposals like the “fast track reclaim” to recover branded assets. With such concentration of votes, these critical initiatives could be approved or rejected based on the interests of a few, rather than reflecting the genuine consensus of the community. Minority voters fear that their voices will be ignored in decisions that affect the protocol’s future.

What Does the Community Expect?

The DAO community faces a fork in the road: continue with the status quo or reimagine voting mechanisms. Some propose quadratic voting systems, others suggest voting power limits, and several advocate for a gradual redistribution of AAVE among smaller participants. What is clear is that Kulechov’s purchase has crystallized a problem that Aave needs to urgently address if it wishes to maintain its legitimacy as a truly decentralized protocol.