Aave token holders voted against a controversial governance proposal seeking to place control of the protocol’s brand assets under DAO ownership.
On Friday, the snapshot poll closed with 55.29% voting “NAY” and 41.21% abstaining. Only 3.5% of voters supported the proposal.
The proposal asked whether Aave (AAVE) token holders should regain control over Aave’s domains, social handles, naming rights and other intellectual property through an entity under a decentralized autonomous organization (DAO). Supporters framed the move as a step toward decentralization and clarifying questions about brand stewardship.
The rejection closed a tense governance episode for Aave, one of decentralized finance’s (DeFi) biggest lending protocols. It highlighted how timing, escalation and participation can shape governance outcomes in a DAO.
Community members cite deeper token-equity tensions
Beyond the vote itself, the rejection surfaced deeper concerns among influential token holders about how value capture and governance are structured at Aave.
Wintermute founder and CEO Evgeny Gaevoy said on X that the trading firm voted against the proposal while urging Aave Labs to engage seriously on long-term alignment.
Gaevoy said resolving token value capture remains critical not just for Aave but for the broader crypto ecosystem, adding that success on that front could serve as a model for other protocols grappling with similar challenges.
Meanwhile, pseudonymous Lido advisor Hasu framed the dispute as part of a more fundamental problem with token-equity dual structures.
In an X post, Hasu argued that combining governance tokens with separate equity entities creates misaligned incentives that are “fundamentally broken” and makes effective governance difficult.
Hasu said that while such structures emerged out of necessity at the time of regulatory hostility, long-term investors viewed them as transitional rather than permanent.
“As a long-time investor in Aave, I hope all parties can come to the table and design a solution that aligns everything either under a singular token or equity structure,” Hasu wrote.
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Governance tensions built ahead of the final vote
The rejection followed days of controversy over how the proposal was brought to a vote, after a governance discussion escalated into a broader dispute over process and power.
Critics had previously objected to the decision to fast-track the proposal to snapshot while discussions were still ongoing. Some argued that the move limited participation and undermined governance norms.
The dispute unfolded as Aave founder Stani Kulechov faced scrutiny over governance influence. Kulechov reportedly purchased $10 million AAVE tokens ahead of the vote.
Community members argued that the episode highlighted structural weakness in token-based governance, where large holders can materially influence outcomes.
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