The tension inside Aave has escalated into what many community members now openly describe as a civil war.
At its core is a dispute between Aave Labs, the private company that has historically driven product execution and brand stewardship, the Aave Foundation, and the Aave DAO, which governs the protocol through token-based voting.
What began as a technical disagreement over fees and interfaces has evolved into a deeper identity crisis about ownership, power, and representation.
The debate intensified dramatically after a controversial governance proposal concerning brand assets and, more recently, a $10 million AAVE token purchase by the protocol’s founder. Together, these events have exposed structural frictions that extend far beyond Aave itself.
Stani Kulechov’s $10 Million AAVE Purchase
The most combustible moment in Aave’s current dispute came when Stani Kulechov acquired roughly $10 million worth of AAVE tokens just ahead of a decisive governance vote.
On paper, the purchase was not unusual. Founders buying their own tokens has long been framed as a signal of confidence. In this case, however, the timing transformed a routine market action into a political flashpoint.
Critics quickly argued that the purchase materially increased Kulechov’s voting power at a critical juncture.
DeFi strategist Robert Mullins was among the most vocal, claiming the move highlighted how token-based governance can fail to discourage power concentration when large holders step in during high-stakes decisions.
Others questioned the broader economic logic, pointing out that Kulechov had reportedly sold significant amounts of AAVE in previous years, making the sudden reaccumulation appear strategic rather than purely financial.
What unsettled many token holders was not just the purchase itself, but what it symbolised. A founder with deep historical influence, extensive social capital, and now reinforced voting weight sits uncomfortably with the idea of decentralised decision making.
While no rules were broken, the episode forced the community to confront an uncomfortable reality. Governance systems may be decentralised in theory, but in practice, they remain vulnerable to capital-driven influence, especially when insiders act during moments of uncertainty.
Supporters of Kulechov countered that founders should not be excluded from participating in governance, particularly when they remain deeply invested in the protocol’s long-term success.
From this perspective, the purchase was framed as alignment rather than manipulation. Yet even among those sympathetic to this view, there was an acknowledgement that optics matter. In a governance environment already strained by mistrust, perception can be just as powerful as intent.
The Ongoing Civil War
The token purchase did not occur in isolation. It landed in the middle of an already fractious governance battle over who ultimately controls Aave’s brand, domains, social channels, and intellectual property.
A recent proposal sought to place these assets under a DAO-controlled legal structure, arguing that token holders who bear economic risk should also control the protocol’s public identity.
The vote was pushed to Snapshot amid ongoing debate, a move that many felt short-circuited community consensus-building.
Former Aave Labs contributors publicly criticised the process, stating that the proposal had been escalated prematurely and without proper alignment.
The backlash was immediate. Voting data revealed that a small number of wallets controlled a disproportionate share of voting power, with the top three voters accounting for more than half of all votes cast.
For many, this confirmed long-standing fears that governance outcomes can be shaped by a narrow set of large holders rather than the broader community.
Beneath the procedural arguments lies a deeper philosophical divide. One side believes that decentralised governance should evolve to reflect where execution, risk management, and revenue generation now occur.
From this view, the DAO has become the engine of Aave, funding upgrades, managing risk parameters, and sustaining the protocol across market cycles. Allowing a private company to retain control of the storefront, in the form of branding and distribution, creates a structural imbalance.
The opposing camp sees things differently. Supporters of Aave Labs argue that the protocol’s scale and reputation are inseparable from the company’s ability to execute quickly, form partnerships, and maintain accountability.
They warn that transferring brand control to a DAO-governed entity could slow development, complicate legal relationships, and weaken Aave’s competitive position. In their view, DAOs remain ill-suited to operate consumer-facing brands without introducing friction and ambiguity.
This split has fractured the community. Token holders, contributors, and builders are no longer debating a single proposal, but competing visions of what Aave is meant to be.
Is it a protocol whose identity should be fully owned and directed by token holders, or a hybrid system where decentralised governance coexists with centralised execution?
The voting process itself has become part of the controversy, with abstentions and no votes reflecting discomfort not just with the proposal’s substance, but with how power is exercised within the DAO.
Conclusion
Aave’s current conundrum is not merely about one vote or one token purchase. It is a stress test for token-based governance at scale.
The dispute between Aave Labs, the Foundation, and the DAO exposes unresolved questions about ownership, accountability, and influence that many large protocols have postponed rather than solved.
Stani Kulechov’s $10 million AAVE purchase has intensified scrutiny, but the deeper issue is structural.
As decentralised systems mature, they must confront how power is distributed and perceived. How Aave resolves this conflict will shape not only its own future, but also broader expectations around governance in decentralised finance.