Aave governance controversy escalates: proposal passes with only 52%, founder Stani Kulechov promises structural amendments

On March 3, according to DL News, the governance proposal for DeFi lending protocol Aave passed an initial snapshot vote amid intense community debate. Data shows the proposal was approved with approximately 52% in favor and 42% against. Shortly afterward, Aave founder Stani Kulechov stated that the plan would undergo “structural improvements” after incorporating community feedback and further refine the final version.

The proposal was put forward by Aave Labs and its core idea is to directly allocate all revenue from Aave-branded products to the DAO (Decentralized Autonomous Organization). The involved products include the aave.com website and the Aave mobile app. This model aims to strengthen the DAO’s revenue streams and push the protocol into a new phase of governance and economic structure.

However, the proposal also requires the DAO to pay Aave Labs tens of millions of dollars in development funds, including $25 million for ongoing product development, $17.5 million for specific product release phases, and 75,000 AAVE tokens. Based on recent market prices, these tokens are valued at about $9 million. Some community members believe that such expenditure is too aggressive given the current funding scale.

Another point of controversy concerns Aave protocol’s future technical roadmap. Aave Labs is pushing the community to shift focus from the current Aave v3 to the upcoming v4 version. Data shows that Aave DAO has accumulated approximately $286 million in revenue, with over three-quarters coming from the v3 protocol. Although v4 is still undergoing security audits, the team expects to launch it later in 2026.

Aave Labs stated on the governance forum that the architecture of v3 is nearing its performance limits, and v4 will bring richer revenue models and greater scalability. However, this transition plan has sparked disagreements within the DAO.

Marc Zeller, head of the Aave Chan Initiative, criticized that Aave Labs’ influence in governance is continuously growing and questioned the fairness of the voting process. He even described the current situation as a “slow-motion coup.” In his latest response, Zeller said his team will no longer participate in discussions about the proposal.

Meanwhile, some institutional investors have expressed differing opinions. Alex Larsen, General Partner at Blockchain Capital, noted that because custodial platforms no longer support snapshot voting, some institutions holding large amounts of AAVE tokens were unable to participate in this vote. If these institutions had been able to vote, the proposal might have passed with even greater support.

As Aave v4 approaches release and DAO governance structures continue to evolve, the debate over the protocol’s future direction persists. The market remains focused on whether Aave can advance to the next stage of DeFi protocol upgrades while maintaining decentralized governance.