Can Aave founders' $5 million stake increase end the governance battle?
TL;DR
Stani Kulechov's $5.15 million purchase of AAVE failed to quell the governance dispute and instead exacerbated the community division. The current brand rights proposal vote (December 23-26) has triggered a strong backlash due to bypassing author consent and being pushed through during the holiday period. The mainstream community opinion leans towards continued conflict rather than reconciliation, and the 7-10% drop in AAVE price reflects market concerns about the division.
Core Analysis
Details of founder's increased shareholding
Purchase scale and timing :
- Purchase quantity : 32,660 AAVE (exchanged for 1,699 ETH)
- Transaction amount : Approximately US$5.15 million, average cost: US$157.78/AAVE
- Trading date : December 23, 2025 (the day voting begins)
- Changes in holdings : Total holdings increased to 84,033 AAVE (approximately US$12.6 million), with a current unrealized loss of US$2.29 million.
- Wallet address : 0x47ca539b3f546078d97bd851130741c6bf370100
Market reaction : AAVE prices fell 7-10% during the controversy, indicating that the market's negative reaction to the governance split outweighed its positive interpretation of the founders' increased holdings.
Background and core of the proposal
Proposal content :
| Controversial Areas | Aave Labs' stance | DAO Community Demands |
|---|---|---|
| Brand equity | Private entities hold (domain names, social media accounts, naming rights). | DAO controls all brand IPs and derivative assets. |
| Cost Allocation | CoWSwap integration fees go into the Labs wallet (approximately $10 million annually). | All agreement fees will be deposited into the DAO treasury. |
| Governance process | In accordance with the rules, this will expedite the decision-making process after 5 days of discussion. | By bypassing the author's consent, forcefully pushing content during holidays violates trust. |
| legal entity | Oppose establishing a DAO entity (high cost, complex governance). | Establishing a Cayman Islands foundation to achieve asset DAO (Decentralized Asset Organization) |
Key information in the proposal :
- Proposal Title : "[ARFC] $AAVE Token Alignment. Phase 1 - Ownership"
- Initiator : Ernesto Boado (Co-founder of BGD Labs, former CTO of Aave Labs)
- Voting platform : Snapshot (off-chain voting)
- Voting period : December 23, 2025, 10:40 UTC to December 26, 2025
- Voting weight : stkAAVE balance based on the December 22 snapshot.
Procedural controversy : The proposal's author, Boado, did not agree to proceed with the vote, but Aave Labs/Stani unilaterally pushed the proposal to Snapshot, sparking criticism of "bypassing consensus" and "holiday manipulation of participation."
Community sentiment analysis
Key opinion leader positions
Strong support for the DAO control faction :
| figure | identity | Key points |
|---|---|---|
| Marc Zeller | Aave Chan Initiative Leader and Key Representatives | The vote was described as a "hostile takeover," and the timing of the vote was criticized for restricting participation and violating the principle of trust. |
| Ernesto Boado | Proposal author, co-founder of BGD Labs | Opposes hasty voting without their consent, emphasizing its disruption of ongoing discussion and community engagement. |
| Jordan Lazaro | Former COO of Aave | Criticism of Stani for prioritizing individual purchases over neutral governance promotion is seen as a failure of alignment of interests. |
| @DeFi_EzR3aL | DeFi Analyst | On-chain evidence shows that fees were transferred to Labs, described as "quietly cutting revenue from the DAO". |
Labs' defense/cautionary stance :
- Stani Kulechov (CEO of Aave Labs): He argued that the process complied with governance rules, aimed to resolve protracted debates, and invited token holders to make decisions (without mentioning the relationship between individual purchases and proposals).
- 0x4444 : Advocates for embracing composability and believes that the prosperity of Labs is beneficial to the ecology.
- Fulltilt believes that the governance maturity of DAOs is insufficient for operating assets.
- BCV : We suggest focusing on on-chain abstractions rather than asset disputes.
Timeline of Controversial Issues
| date | event | Influence |
|---|---|---|
| December 16 | Boado releases brand rights proposal at governance forum | Let's begin formal discussion |
| December 22 | stkAAVE balance snapshot (voting weight benchmark) | Determine the distribution of voting power |
| December 23 | Labs is pushing Snapshot voting without the authors' consent. | The community reacted strongly, criticizing the improper procedures. |
| December 23 | Stani purchased 32,660 AAVE ($5.15 million). | This was interpreted as a sign of siding with Labs rather than remaining neutral. |
| December 22-23 | AAVE prices fell by 7-10%. | Markets reflect concerns about governance divisions |
Community narrative polarization
The prevailing narrative is a "governance civil war," using terms such as "hostile takeover" and "poison pill proposal," and raising suspicions that Labs and the DAO are aligned in their interests.
A minority of contrarian narratives : Stani's increased holdings are seen by some as a signal of long-term commitment, potentially turning bullish after the dispute is resolved, but this view has not become a mainstream consensus.
Overall polarity : leaning towards continued conflict and bearish sentiment, with community protests overshadowing optimistic interpretations of the increased holdings; the increased holdings were not widely seen as a signal of immediate reconciliation.
On-chain data analysis
Distribution of voting power
Overall structure :
- Total AAVE supply : 16,000,000 AAVE
- Total stkAAVE (based on voting power): 2,396,468.57 stkAAVE
- Stani's current voting power : 0 stkAAVE (newly purchased AAVE, not staked, has no voting power)
Concentration of major voting rights :
| address | stkAAVE holdings | Total voting rights |
|---|---|---|
| 0x8cd291...8b15d | 333,000 | 13.90% |
| 0x54a1be...359b2 | 175,731 | 7.33% |
| 0xdc0990...2791a | 108,318 | 4.52% |
| 0xaed37c...1886a | 106,282 | 4.43% |
| 0xbef66f...6bd0 | 81,479 | 3.40% |
| The top 5 combined | 804,810 | 33.58% |
Key findings :
- Stani purchases unconverted voting rights : $5.15 million increase in unpledged stkAAVE shares, with no direct impact on current voting.
- Voting power is highly concentrated : the top 5 addresses control 33.58% of the voting power, and the top 20 may control a majority.
- Labs' voting rights are unclear : The stkAAVE holdings in the official Aave Labs wallet could not be confirmed.
Execution risk assessment
The Phase 2 challenge after Phase 1 is passed :
| Risk type | Specific risks | degree of impact |
|---|---|---|
| Legal complexity | Establish a DAO controlling entity (Cayman Foundation initial cost: US$30,000, annual operating cost: US$75,000). | medium |
| New Centralization Risk | "Neutral third-party" management may create new points of concentration of power. | medium |
| Service Provider Confrontation | Labs/BGD Labs may not cooperate with the asset transfer, requiring legal action. | high |
| Governance maturity | The ability of DAOs to operate off-chain assets is questionable, and there is a lack of precedent. | high |
| Community division | Low participation rates during holidays may result in a lack of broad legitimacy in voting results. | high |
No execution payload : The current Snapshot vote is a signal vote, and the actual execution depends on the Phase 2 negotiation. Even if it passes, it has no enforcement power.
in conclusion
The governance struggle is unlikely to end through increased shareholding , for the following reasons:
Increased holdings of unconverted voting rights : The $5.15 million purchase of AAVE shares was not pledged and has no direct impact on the December 23-26 vote, thus it cannot influence the outcome.
Community divisions have intensified : key figures, including major representatives, proposal authors, and former executives, strongly oppose the process, criticizing the holiday push and bypassing of consensus, and viewing increased holdings as siding with Labs rather than a neutral reconciliation.
Negative market pricing : A 7-10% price drop indicates that market concerns about governance splits outweigh confidence in the founders.
Unresolved structural contradictions : Conflicts of interest persist regarding core interests such as cost allocation (US$10 million annually) and brand control; Phase 2 implementation faces multiple risks including legal, organizational, and adversarial challenges.
The outcome of the vote is uncertain : Regardless of the result on December 26, a decision lacking broad consensus could lead to ongoing controversy and even bifurcation pressure.
Short-term outlook : The governance battle will continue at least until the end of the vote (December 26) and the Phase 2 negotiation phase. Market volatility and community divisions may persist for weeks to months unless both sides reach a compromise governance framework.