Aave token holders have voted against a governance proposal that would have shifted control of the protocol’s brand assets to an entity governed by the DAO. The decision followed days of heated debate across the community.
The Snapshot poll closed on Friday with a clear rejection. Most voters said no, while a large share abstained. Final results showed 55.29% voted against the proposal. Another 41.21% abstained, and only 3.5% voted in favor.
Source: Snapshot
The proposal focused on who should control Aave’s domains, social media accounts, naming rights, and other intellectual property. Supporters said DAO ownership would push the protocol closer to true decentralization.
Opponents were not convinced by the timing or the process. The proposal went to a vote before resolving key questions, according to them.
The rejection brought an end to a tense governance episode for Aave. Deeper concerns about the DAO’s decision-making process also surfaced.
Many token holders said the debate went beyond branding. They raised questions about long-term alignment between Aave Labs and token holders.
Wintermute flags concerns over Aave token value
Wintermute founder and CEO Evgeny Gaevoy confirmed that his firm voted against the proposal. He said Aave needs a more serious discussion about how token holders benefit over time.
Gaevoy further stated that value capture is still one of the key concerns of most crypto protocols. According to him, Aave would have a chance of being an example if it got this right.
External commentators were also interested in the dispute. Lido advisor Hasu framed the issue as a structural problem, putting it into perspective.
Hasu condemned the integration of governance tokens with autonomous equity bodies. According to him, this arrangement gives contradictory incentives and undermines good governance.
He clarified that most of the projects embraced such models at times when there was regulatory pressure. They were never considered as a final solution by long-term investors, he said.
Hasu demanded the integration of governance and ownership into a single structure. He asserted that this approach would enhance decision-making and reduce internal friction.
Issues with the process were a significant factor in the backlash. The decision to rush the proposal to a Snapshot vote was criticized.
Governance process faces scrutiny after fast tracked vote
According to some community members, the move restricted participation. They claimed it ruined faith in the process of governance.
The episode also brought back issues with concentrating tokens. Large holders can significantly influence DAO votes.
The dispute shifted the focus on Aave founder Stani Kulechov. It was reported that he purchased $10 million of AAVE tokens prior to a vote.
Community members reported that the buy demonstrated flaws in the token-based system of governance. They cautioned about large holdings as a way of influencing results.
At this point Aave is going to retain its existing brand control structure. The vote leaves greater questions yet unanswered about reforming governance.