Aave DAO Challenges Labs' $51 Million Funding Request
Aave DAO and Aave Labs are in a deepening governance conflict over a $50-51 million funding request from Aave Labs, despite the protocol recently surpassing $1 trillion in cumulative lending volume. The dispute centers on budget transparency and operational control. The 'Aave Will Win' proposal, seeking to route these funds to Aave Labs, has brought these issues to a head.
Core Contributor Departures and DAO Advocacy
The conflict escalated with the reported exit of core contributors, BGD Labs. Advocating for the DAO's interests are the Aave Chan Initiative (ACI) and community steward Marc Zeller, who push for transparency and accountability, demanding an audit of Aave Labs' financial requests before approving funding.
'Aave Will Win' Proposal Faces Scrutiny, Rival Reports Emerge
The 'Aave Will Win' proposal drew immediate scrutiny from the Aave DAO. Marc Zeller publicly rebuked Aave Labs' request, citing concerns over allocating funds to a centralized team without transparency or clear performance metrics. The Aave Chan Initiative (ACI) conducted an audit of Aave Labs' budget justifications.
ACI and Aave Labs subsequently released rival reports, presenting conflicting perspectives on the protocol's financial health and operational needs. A preliminary vote on the proposal was scheduled for February 26.
$AAVE Token Declines Amid Governance Dispute
The governance conflict generated bearish sentiment within the $AAVE community. Sentiment scores registered as low as -58 in discussions concerning budget transparency and the dispute.
The $AAVE token declined 4.8% over 24 hours to $114.01, and 7.8% over seven days. This coincided with the public escalation of the governance dispute, which also saw a 0.1% mindshare change for $AAVE.