Aave DAO Moves to Control Protocol Brand Assets Amid Clash

Aave DAO Proposes Transfer of Protocol Brand Assets from Aave Labs to Token Holders Amid Revenue Dispute

  • Aave DAO is seeking to transfer control of the protocol’s brand assets from Aave Labs to its token holders.
  • The move aims to centralize ownership of web domains, social media accounts, and trademarks under the DAO.
  • The proposal follows disputes over revenue streams linked to token swap features on the protocol’s website.
  • There is existing precedent for DAOs obtaining control of such assets through legal structures.
  • Several community members, including former Aave Labs COO Jordan Lazaro Gustave, have expressed support for the change.

Aave DAO, the decentralized autonomous organization that governs the DeFi lending protocol, is considering a proposal to take ownership of the platform’s brand assets. This includes control over the protocol’s web domains, social media channels, and trademarks. The idea was introduced on December 13 by Ernesto Boado, a co-founder of Bgdlabs and contributor to Aave, on the Aave governance forum.

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The proposal arises amid a dispute between Aave DAO and its developer, Aave Labs. On December 11, token holders led by the pseudonymous delegate EzR3aL accused Aave Labs and founder Stani Kulechov of privatizing revenue that had previously benefited the DAO. This conflict was sparked by Aave Labs’ integration of a new token swapping feature with decentralized exchange CoW Swap on the protocol’s website. The previous swap functionality, which generated revenue for the DAO, was replaced by the CoW Swap feature, whose income goes to Aave Labs.

In response, Aave Labs clarified that the prior revenue was only donated to the DAO and stated that new funds are needed to maintain the protocol’s website, which it operates.

Boado explained that there are community concerns over private monetization using brand assets without DAO oversight. The proposal requests a vote among Aave token holders to decide on transferring ownership of the brand assets to the DAO, held within an appropriate legal entity controlled by the community.

There is precedent for such transfers in the DeFi space. Some protocols retain trademark ownership within their development firms, like Uniswap and Uniswap Labs, while others house assets in non-profit foundations that abide by token holder decisions, such as Lido and the Lido Labs Foundation. Some creators maintain control to avoid legal risks, but shifting regulatory clarity in the U.S. may reduce this need.

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Support has grown quickly for the proposal, attracting backing from key governance members including EzR3aL and former Aave Labs COO Jordan Lazaro Gustave. Gustave described the move as “the natural next step in Aave’s decentralisation, especially now that DeFi benefits from far more regulatory clarity than in prior cycles,” and added that “We should not have to fear that the implicit steward of the brand may at any point leverage that brand for their own benefit without it directly benefiting the DAO and especially not without DAO consent.”

Since the proposal is recent, no formal vote has yet been scheduled. Proposals that generate significant community discussion and support typically proceed to a preliminary token holder vote. Aave Labs has not issued a public statement regarding the proposal as of now.

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