Aave is in the throes of a governance crisis. This revolves around who should control the brand and its assets. Thus has intensified the existing divide between the token holders’ Aave DAO and Aave Labs, the centralized developer firm behind the protocol’s technology.
The governance crisis was sparked by swap fees from a trading tool being allocated to Aave Labs instead of the DAO treasury. This raised questions about ownership of the brand, trademarks, domains, and social media accounts of a protocol that holds more than $33 billion in total value locked, fueling the argument that brand control should align with the risks borne by the token holders.
Now, however, the latest vote count shows a majority of votes cast against transferring ownership to the DAO. These intricate dynamics show the tensions between decentralization, efficiency, and development in the governance of DeFi protocols.
