Author: Azuma, Odaily
Over the weekend, the Aave community experienced an extremely intense debate.
On one side was the core development team Aave Labs led by founder Stani Kulechov, and on the other was the community group represented by Aave DAO spokesperson Marc Zeller.
The debate focused on the issue of "whether a new token should be issued outside of AAVE" triggered by a new proposal, and the final result was that under strong opposition from the community, Stani stated that he would temporarily shelve this new proposal.
Origin: A new proposal with hidden intentions
The event can be traced back to March 13 local time.
On that day, Aave Labs initiated a proposal on the governance forum, proposing to launch a new program called Horizon to venture into the RWA business, which is currently missing from Aave's business landscape. The vision of the Horizon program is to allow institutions to use tokenized money market funds (MMFs) as collateral to borrow USDC and GHO on a large scale, thereby releasing stablecoin liquidity and promoting institutional access to DeFi.
At first glance, this proposal seems to have no problem, and it is even a very effective supplement to Aave's business situation, but the key lies in the other content implied in it.
Aave Labs also proposed in the proposal to issue a new token for the Horizon program, with only 15% of the new tokens to be allocated to the Aave DAO, with the specific allocation as follows:
10% goes to the Aave DAO treasury
3% reserved for Aave ecosystem incentives
2% airdropped to Staked Aave (stkAAVE) holders - meaning that existing AAVE stakers (not just holders) can only receive 2% of the new tokens.
At the same time, Horizon will also allocate a portion of the profits to the Aave DAO, with the following allocation ratios:
First year: 50%;
Second year: 30%;
Third year: 15%;
Fourth year and beyond: 10%;
Obviously, in Aave Labs' preset scenario, Horizon will only provide a high percentage of profit sharing to the Aave DAO in the early stage of limited business scale, and the reward allocation ratio will gradually decrease as the business scale expands in the future.
Progress: Community outrage, collective opposition
It is not difficult to foresee that the Aave community, which is mainly composed of token holders, will find it difficult to support such an obvious value diversion proposal.
As soon as Aave Labs' proposal was released, it quickly sparked a huge wave across the entire community, with a large number of users leaving comments and replies at the bottom of the proposal (some users even registered the forum for the first time specifically for this proposal and spoke), and basically all the replies expressed opposition.
Community member gregrwalsh commented:
I don't understand why you would want to dilute the AAVE token. If a new token is needed for some reason, it should be 1:1 with the AAVE token, and holders will receive their allocation accordingly. The Aave DAO's revenue share is also declining. This is clearly Aave Labs planning to build a new entity. I don't support this proposal.
Community member Apu Mallku commented:
This seems to be an attempt by Aave Labs to make money, which is very disappointing for long-term AAVE holders.
Community member sreno commented:
If Horizon is an Aave DAO initiative, then value accrual should flow to the Aave DAO and the AAVE token, not just 15% of the new tokens allocated to the Aave DAO. The Aave DAO should retain full control and ownership of the Horizon plan... The structure of the proposal is permeated with the aroma of VCs.
Community member knew made a comparison with the Maker case:
I firmly oppose the new token proposal, just look at what happened when MakerDao upgraded to sky.money and issued a new token, MKR has been falling and will continue to fall. Investors will be confused and the community will be traumatized. Aave is facing fierce competition, if token holders leave the community and the AAVE price falls in the long run, market share will also be handed over.
The reaction of community member zzzzz was even more radical:
I have sold all my AAVE, even if this proposal is rejected in the future, the fact that Aave Labs dared to put forward such an absurd proposal is simply incomprehensible - this is a complete betrayal. This is not just reckless, it is a shameless act of plunder, showing that they intend to exploit the community for their own greedy interests...
More opposing opinions can be viewed in the original post.
Climax: Division of will at the top
While the community clearly expressed opposition, Marc Zeller, the frontman of the Aave DAO governance and the founder of the Aave Chan Initiative (ACI), clearly stated that he did not support the issuance of a new token, and Aave should only have AAVE as its token.
Marc Zeller also mentioned that Aave Labs was obviously able to foresee the community's reaction to this, but still chose to release the proposal. Such an outrageous allocation ratio is actually a "negotiation tactic" commonly used by Aave Labs, that is, when they want to achieve a certain plan, they do not directly propose that plan, but propose an even more absurd version, so that the community will take a step back and choose the original plan.
Marc Zeller finally stated that the proposal is not even worth considering, and the ACI is firmly opposed, and every member of the community should stand up.
Under the pressure, the founder Stani himself had to come out and make a statement in the governance forum on March 14 local time:
The Horizon program aims to fill the RWA business segment currently missing from Aave, and this program is expected to surpass the revenue of Aave's current business lines in 5 years;
The Horizon program is more suitable to operate in a centralized mode, so it is not suitable for the current Aave DAO structure;
The Aave DAO will not bear any costs due to the Horizon program;
For business development considerations, Horizon needs a token;
What's really important is to determine the numbers so that the Aave DAO can confidently see this plan move forward and unlock more revenue sources for the DAO.
Obviously, Stani was still unwilling to give up the plan to issue a new token at the time, and hoped to push the proposal through by negotiating a more reasonable allocation ratio.
Ending: The founder was forced to compromise
In addition to responding on the forum, Stani also engaged in heated debates with the community on his personal X account about the proposal.
Stani kept emphasizing that the plan would not incur any additional costs for the Aave DAO, but would only bring new revenue opportunities, but the community was obviously more concerned about whether the value expectation of AAVE would be diluted.
Community user Champaqui was even very disappointed and compared Stani to the Ethereum Foundation (EF):
I'm starting to feel the atmosphere of the Ethereum Foundation (EF) in Stani, he completely can't hear what the community is saying, and is out of touch with reality. This is very disappointing. He always thinks he is right.
The debate continued, and in the end Stani chose to compromise.
On March 16, Stani finally posted on his personal X account and said:
The overall consensus of the Aave DAO is that they are not interested in other tokens. The consensus will be respected, the Aave DAO is a true DAO, and the RWA exploration will continue once the right approach is found. Aave only has AAVE.
Aftermath: Suspense unresolved, doubts hard to dispel
This storm, which community members called "the most dangerous proposal in Aave's history", has come to a stage-by-stage conclusion, but there are still many puzzling issues, the biggest of which is why Stani, as the founder of Aave, would rather risk the community's taboo and try to push a new token, but unfortunately, apart from Stani, no one really knows the answer.
As X user solarcurve said:
The most serious problem now is that the community knows that Aave Labs is actively developing new products/companies, but most of the value created will not flow to AAVE holders.
Although Stani has responded positively to this, it still seems difficult to calm the public opinion.
We are fully aligned with Aave, as we are one of the biggest stakeholders, and there is still decades of work and innovation to be done.
Doubts are easy to arise and hard to dispel, and for Aave Labs to regain the trust of the community, more work needs to be done.
