Aave DAO Rejects Brand Control Transfer in Record-Breaking Governance Vote

Aave community members delivered a decisive rejection to a controversial governance proposal aimed at transferring brand ownership from Aave Labs to the DAO. The December 25 vote marked a historic participation milestone for the leading DeFi protocol, with unprecedented engagement from token holders.

Record Turnout Ends Brand Ownership Debate

The “[ARFC] $AAVE token alignment. Phase 1 – Ownership” proposal witnessed extraordinary turnout as 1.8 million AAVE holders participated in the on-chain voting process. Results showed a clear rejection: 994,800 AAVE (55.29%) voted against the measure, 741,600 AAVE (41.21%) chose to abstain vote, and only 63,000 AAVE (3.5%) supported it.

The proposal fundamentally sought to place Aave’s critical brand assets—including domains, social media accounts, and naming rights—under DAO governance structures. This would have transferred control from Aave Labs to the decentralized organization, adding protective mechanisms to prevent unauthorized use.

Community members heavily criticized the timing, arguing the proposal rushed forward “during the holiday season” while essential debates about Aave Labs’ governance direction remained unresolved. This governance dispute has crystallized into one of the most consequential DAO decisions in DeFi history, establishing precedents for future protocol-level voting mechanisms.

Root Causes: Revenue and Alignment Tensions

The underlying conflict stems from December discoveries that Aave Labs had integrated CoW Swap into its official app.aave.com interface, redirecting swap fees—potentially worth $10 million annually—to Aave Labs-controlled wallets instead of the DAO treasury. The previous ParaSwap integration had distributed such revenues to the DAO, intensifying accusations of what community members termed “stealth privatization” and economic misalignment between the development entity and token holders.

Leadership Perspectives on the Vote Outcome

Stani Kulechov, Aave Labs founder and CEO, framed the outcome positively despite backing the proposal. He characterized the vote as “a productive discussion essential for Aave’s long-term health” and committed to clarifying economic alignment between Aave Labs and AAVE holders. Kulechov also disclosed his recent $15 million personal AAVE purchase, emphasizing this reflected conviction in the protocol rather than vote manipulation: “This is my life’s work. I am putting my own capital behind my conviction.”

Marc “Billy” Zeller of the Aavechan Initiative advocated for abstain votes, citing compressed timelines and ongoing debate as unsuitable conditions for such critical decisions. Yet he celebrated the participation itself, highlighting that despite disadvantageous circumstances, the 1.8 million voting power participation rate demonstrated genuine decentralization strength. “DeFi will win,” he stated, emphasizing that robust participation—not mere agreement—defines healthy DAOs.

Evgeny Gaevoy, Wintermute’s co-founder and an AAVE investor, voted “NO” and noted “clear expectation mismatches” across multiple dimensions. He argued the proposal lacked sufficient specificity regarding governance structures, profit orientation, and token holder value protection, requiring further development before implementation.

Parallel Protocol Movements

Notably, the same day witnessed Uniswap’s DAO approval of its UNIfication governance proposal, authorizing a 100 million UNI token burn and activating fee switches—highlighting divergent governance outcomes across major DeFi platforms.

AAVE Market Snapshot (Current Data: January 19, 2026)

• Price: $162.92
• 24h Change: -6.01%
• Market Cap: $2.47B
• 24h Volume: $8.02M