Aave token holders have voted down a proposal that sought to move control of the protocol’s brand assets under DAO governance.
Key Takeaways
- A controversial proposal to shift ownership of Aave’s domains, social media handles, and intellectual property to a DAO-controlled entity was rejected by token holders.
- 55.29% of voters opposed the move, while 41.21% abstained and only 3.5% voted in favor.
- The vote exposed underlying tensions within Aave’s governance system, particularly around token-equity structures and decision-making transparency.
- Criticism was also directed at the fast-tracked voting process and influence of large token holders.
What Happened?
The Aave community recently voted against a governance proposal that aimed to transfer the protocol’s brand-related assets to a DAO-controlled entity. The proposal, called ARFC, was intended to decentralize ownership of Aave’s domains, social accounts, and naming rights. The vote closed on December 26, with a clear majority rejecting the motion.
🚨 @aave “Civil War” Update: This is nowhere near over.
— Observe (@obsrvgmi) December 26, 2025
Aave’s “token alignment” vote just ended.
And yes, as expected, Aave DAO lost.
Which means Aave Labs keeps control of the brand for now.
But if you think the drama ends here, you’re wrong.
Very wrong. Here’s why 👇… https://t.co/MlabhIDxsK pic.twitter.com/bTrI7zs60X
A Governance Proposal That Divided the Community
The governance proposal was pitched as a step toward increased decentralization. By placing Aave’s brand assets under the control of a legal structure tied to the DAO, supporters believed it would align brand ownership with community interests and provide clarity around usage rights. However, the proposal quickly became a flashpoint for broader debates about governance in decentralized protocols.
Voting concluded with:
- 994,800 votes (55.29%) against the proposal.
- 63,000 votes (3.5%) in favor.
- 41.21% of participants abstained.
The rejection was more than just a vote on asset control. It revealed deep disagreements about how governance should function in decentralized finance, especially when decisions affect intellectual property and strategic direction.
Token-Equity Tensions at the Forefront
The backlash to the proposal unearthed long-standing concerns among major token holders about Aave’s token-equity structure. Wintermute CEO Evgeny Gaevoy stated on X that his firm voted against the measure, calling for Aave Labs to take governance and value alignment more seriously.
He emphasized that resolving how tokens capture value is not only vital for Aave but could serve as a model across the broader crypto space.
Disclosures first (as should be customary). Wintermute (ventures) has been an investor in AAVE since 2022. We also have participated in governance and it is a decent part of our venture portfolio. I personally hold AAVE as well. Neither me personally, nor Wintermute have exposure…
— wishful_cynic (@EvgenyGaevoy) December 25, 2025
Hasu, a pseudonymous advisor to Lido and long-time Aave investor, weighed in as well, pointing to the inherent flaws in dual governance structures that separate token-based control from equity. He described the setup as “fundamentally broken,” warning it creates misaligned incentives and complicates effective governance.
According to Hasu, these structures were formed out of necessity during regulatory uncertainty, but should now be reconsidered. He expressed hope that the community could move toward a unified governance model.
Dispute Over Process and Power
Critics of the ARFC proposal argued not just with its content but also with the way it was handled. The decision to fast-track the proposal to a snapshot vote while discussions were ongoing raised concerns. Some community members felt this limited broader participation and breached Aave’s governance norms.
The situation intensified further when Aave founder Stani Kulechov came under scrutiny. Reports suggested he acquired $10 million worth of AAVE tokens ahead of the vote, raising alarms about disproportionate influence and governance fairness. The episode reignited debate around the vulnerabilities of token-based voting systems, where wealth can translate directly into voting power.
CoinLaw’s Takeaway
In my experience watching DeFi evolve, what happened at Aave is more than a failed vote. It’s a cautionary tale about how decentralization is supposed to work versus how it often plays out. The community wanted more transparency, more time, and a say in shaping the future of the protocol they helped build. But when decision-making becomes top-down or rushed, even the best-intentioned ideas fall apart.
I found the open criticism by top voices like Gaevoy and Hasu incredibly important. These are not outsiders yelling from the sidelines. They are insiders demanding better systems. If Aave can listen and act on this moment, it might come out stronger and more genuinely decentralized.
