While Aave remains fully operational, it is experiencing a full-blown civil war within itself. Aave is the largest DeFi lending protocol, and with over $50 billion in deposited liquidity, it rivals the 50 largest US banks.

But what's going on?

Aave has two sides:
1) Aave Labs: a centralized entity founded by Stani Kulechov.
2) Aave DAO: the token holders who govern the protocol.

In early December, Aave Labs announced a partnership with CoWSwap to improve swap pricing and MEV protection on the Aave interface. An on-chain analysis suggests that fees generated by the new CoWSwap contract are being sent to a private wallet controlled by Aave Labs (not the DAO).

Marc Zeller (the largest delegate, Aave Chan Initiative) estimates that approximately $10 million per year, which should be going to the DAO, has disappeared. Several requests are being processed:
- Seize Aave's code, brand, and trademark.
- Force Aave Labs to become a wholly owned subsidiary of the DAO.
- Recover all past revenue generated using the Aave brand.
- Proposal by Eboadom (former CTO of Aave Labs): immediately transfer the brand, domains and social media to the DAO (if the DAO pays for development and marketing, the DAO must own the brand).

Stani (Aave Labs) reiterated that the CoWSwap integration was not a fee switch, but rather the frontend revenue was voluntary donations.
Furthermore, Aave Labs is a private company, and the DAO owns the smart contracts but not the website. Labs pays for hosting, security, and frontend engineers.

Aave Labs has opened a Snapshot vote to give $Aave token holders complete control over: brand, domains, social media, naming rights, GitHub, etc. Based on Eboadom's proposal (which he claims he never approved). However, Eboadom claims the proposal was launched without his consent and asks for abstention. Marc Zeller claims that the vote was launched during the holidays (when there was little interest), with new proxies that increased the "No" voting power. According to them, Aave Labs' idea was to immediately propose a vote so that the proposal wouldn't pass and would therefore be definitively rejected.

Founder Stani obviously voted "no," Marc Zeller voted "abstained", like other major holders. The "No" vote is winning, so the DAO prop is losing.

Possible scenarios:
1) Aave DAO forks the frontend.
2) It moves forward, even though the proposal was launched controversially.

I don't think there will be a legal battle, also because the courts should stay out of DeFi. In any case, this creates a rift between Aave DAO and Aave Labs. Who really owns the protocols? The team that pays the domains and engineers, or the DAO that owns the smart contracts?

You can find it here: [ARFC] $AAVE token alignment. Phase 1 - Ownership

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