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Aave DAO Passes Contentious Proposal, But Changes Ahead

Controversial Aave funding proposal passes narrowly, sparking community rift and withdrawal.

  • Aave Labs’ controversial governance proposal passed an initial snapshot vote on Saturday with a narrow 52% majority.
  • Founder Stani Kulechov conceded the plan needed “structural improvements” and has already revised its aggressive timeline for launching Aave v4.
  • The proposal would allocate $25 million in development funds to Aave Labs from the DAO’s treasury, a point of contention among delegates.
  • A prominent delegate, Marc Zeller of Aave Chan Initiative, withdrew from debate, calling the process predetermined.

On Saturday evening, Aave Labs’ contentious proposal for the protocol’s future narrowly passed a preliminary community vote. However, founder Stani Kulechov immediately announced amendments were coming based on significant member feedback. The proposed framework involves a substantial financial commitment from the Aave DAO.

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Aave Labs would receive $25 million for ongoing development, plus an additional $17.5 million tied to product launches. Consequently, critics argue the request is excessive relative to the cooperative’s treasury size. The plan also aims to migrate users to a new protocol version, Aave v4, which is undergoing security audits.

Meanwhile, the debate has exposed deep rifts within the decentralized community. Marc Zeller, head of the Aave Chan Initiative, labeled the situation a “slow-motion coup” and has now withdrawn from negotiations. He stated “the dice are loaded” and that continuing would lend illegitimate processes undue credibility.

Conversely, supporters argue the margin of victory would have been larger if not for technical voting limitations. Aleks Larsen of Blockchain Capital noted his firm and other institutional holders were unable to cast supporting votes due to custodian issues. The final proposal will now be revised before progressing to a more binding governance stage.

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