- Aave DAO wants to take control of the DeFi protocol's brand assets.
- Aave Labs currently owns them.
- There is a precedent for transferring control of brand assets like trademarks to a DAO.
The Aave power struggle is intensifying.
A proposal to transfer control of the DeFi lender’s web domains, social media accounts, and trademarks to its token holders is gaining traction.
On Tuesday, Ernesto Boado, co-founder of Bgdlabs, an Aave contributor, floated the idea in a post on the Aave governance forum. It has since been viewed almost 4,000 times, and has generated intense debate among Aave DAO, the protocol’s token holder collective.
“Recent events have raised concerns [from] other community members in the forum that these brand assets are being used to enable private monetisation, and to support products the DAO has no practical say on and is not the main value-recipient,” Boado said.
The proposal comes amid an ongoing scuffle between Aave DAO, the token holder collective that runs the protocol, and its developer, Aave Labs.
On December 11, Aave DAO members, led by the pseudonymous EzR3aL, the DAO’s largest delegate, accused Aave Labs and its founder Stani Kulechov of attempting to “privatise” revenue that had previously gone to the DAO.
On December 4, Aave Labs announced it had partnered with decentralised exchange CoW Swap to integrate a token swapping feature into the Aave website.
The problem? The website already had a swap feature from a different provider. Moreover, the revenue from the previous swap feature had gone to the DAO. Revenue from the CoW Swap integration instead goes to Aave Labs.
In response, Aave Labs said the revenue in question had previously only been donated to the DAO, and that the firm needed the new revenue stream to cover the cost of running the protocol’s website, which it controls.
‘Natural next step’
There is a precedent for transferring control of brand assets like trademarks to a DAO.
The trademarks associated with many DeFi protocols are owned by the protocol’s for-profit developer — like Uniswap and its creator Uniswap Labs.
However, some protocols give brand assets to a non-profit foundation for safekeeping, like Lido and the Lido Labs Foundation. Often these foundations are mandated to follow the outcomes of token holder votes.
Some DeFi protocol creators have opted to keep control of brand assets to avoid exposing token holders to legal risks. Yet, with US President Donald Trump’s administration taking a lighter touch on crypto regulation than the previous administration, such precautions may no longer be necessary.
Boado’s proposal asks for a Aave token holder vote to decide whether Aave’s brand, naming rights, and associated assets should be transferred to the DAO via an appropriate DAO-controlled legal wrapper.
So far, dozens of Aave governance participants and token holders, including EzR3aL who sparked the debate, have indicated support for the proposal.
Among them is Jordan Lazaro Gustave, Aave Labs’ former COO.
“It is the natural next step in Aave’s decentralisation, especially now that DeFi benefits from far more regulatory clarity than in prior cycles,” he said in response to Boado’s proposal.
“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.”
Boado’s proposal is less than a day old, and as such, no vote has been scheduled yet. Proposals that generate substantial debate and receive enough support are usually put to a preliminary vote among the protocol’s token holders.
Aave Labs has not yet responded publicly to the proposal.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
