The governance dispute in the Aave ecosystem has intensified after two detailed reports presented contrasting interpretations of the protocol’s past funding and contributions ahead of a vote on a proposed $50 million package for Aave Labs.
Aave Chan Initiative (ACI) founder Marc Zeller on Wednesday published what he called a transparency report that reviewed Aave Labs’ historical funding and applied an ROI framework to previous DAO grants. A few hours earlier, Aave Labs released its own contribution report outlining its role in the development of the Protocol since 2017.
The dispute centers around the principle of ‘Ave Will Win’, a application asking token holders to approve funding of up to $42.5 million in stablecoins and 75,000 AAVE (AAVE) tokens. In return, Aave Labs will contribute 100% of revenues from Aave-branded products to the Aave DAO treasury under a DAO-funded operating model, according to the proposal and related forum posts.
The debate extended beyond the scope of the funding request to include questions about accountability standards, revenue attribution, and who maintains the protocol’s core infrastructure.
This follows the recent announcement that BGD Labs, a major technology provider, will end its relationship with DAO on April 1.
Competing views on financing and value
Zeller’s report shows that Aave Labs has received approximately $86 million in capitalization over its lifetime, including proceeds from its 2017 initial coin offering (ICO), venture funding and DAO payments.
He argued that future DAO grants should be assessed by taking into account measurable revenue impacts and clearer disclosure standards.
ACI, a service provider for the Aave DAO and not a neutral party in the debate, questioned whether governance votes should be separated into separate funding, revenue adjustment and V4 ratification.
Zeller wrote that funding decisions should be tied to performance benchmarks and lucid reporting.
In its report, Aave Labs highlighted its role in the design and delivery of Aave V1, V2 and V3 and highlighted features it believes underpin the protocol’s current revenue model, including Instant Lending, Security Module and Performance Mode.
Aave Labs argued that counting governance proposals or forum posts did not reflect the full scope of research, development, security and infrastructure work required to maintain a protocol used by millions of users.
What token holders vote on
Under the Aave Will Win program, Aave Labs will transition to a DAO-funded operating model, directing product-level revenues, including aave.com and planned consumer-facing products, to the DAO.
Related: The founder of Curve Finance says that the lack of agreement in the DAO is a robust sign
The proposal also seeks ratification of Aave V4 as the long-term technical basis of the protocol and outlines plans for a novel basis to govern the Aave brand.
Some community members have previously raised concerns about the size of the funding package and the inclusion of 75,000 AAVE tokens that provide voting power.
On February 13, critics called for a clearer definition of income and greater transparency regarding management holdings.
The Snapshot vote, scheduled for Thursday, is an initial off-chain vote that gauges community sentiment before any binding on-chain proposal is submitted.
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