Aave steadies as DAO weighs $51M funding row

Aave governance dispute: what changed and what’s at stake now

A governance clash inside Aave escalated after Aave Chan Initiative (ACI) founder Marc Zeller published a wide-ranging audit of Aave Labs ahead of a $51 million funding vote, as reported by The Block. Aave Labs subsequently released its own metrics and responses, sharpening disagreements over how past funding, swap-fee revenue, and product outcomes have been measured and communicated.

At issue are competing narratives about value creation, transparency, and the division of responsibilities between the DAO and the Aave Labs entity. The dispute now touches front-end revenue rights, the economics of newer initiatives such as the Horizon real-world asset (RWA) market, and whether governance processes are providing sufficient time and disclosures for tokenholders to evaluate major commitments.

Why it matters: Aave Labs’ $51 million funding proposal, swap fees

The pending “Aave Will Win” request seeks $51 million for Aave Labs, placing scrutiny on what deliverables, reporting cadence, and financial transparency would accompany any multi-year mandate. The context includes earlier capital sources referenced by Zeller’s audit, spanning the 2017 token sale, venture rounds, and direct DAO payments, raising questions about how incremental funding should be justified against measurable outputs.

Swap-fee treatment is a core fault line. Zeller’s audit alleges roughly $5.5 million in swap fees accrued to the Labs-side front end rather than the DAO, framing a revenue-allocation gap for tokenholders. Aave Labs counters that these fees reflected a discretionary surplus from a privately maintained front end (aave.com), not DAO-governed protocol revenue, as reported by Brave New Coin.

Critics say the dispute highlights a broader “token-versus-entity” misalignment common across DeFi. “Token–equity dual structures are fundamentally broken,” said Hasu, a DeFi commentator and advisor, as reported by Cointelegraph. The immediate policy question for Aave’s DAO is whether funding, brand assets, and front-end revenues should be more tightly bound to on-chain governance, and under what disclosure and conflict-of-interest rules.

Immediate impact: DAO voting process, AAVE holders, Horizon RWA transparency

Process concerns have also surfaced around proposal timing and scope. Ernesto Boado, former Aave Labs CTO and author of a brand-assets proposal, criticized the acceleration of a vote during a holiday period and said he was not consulted before it went live, as reported by HTX. The episode has renewed calls to codify participation norms. According to the Aave governance forum, an addendum now under discussion would introduce mandatory disclosures and conflict-of-interest voting guidelines.

At the time of this writing, AAVE trades near $123.21 with a 14-day RSI around 40.73 and very high measured volatility near 11.20%. These readings offer market context only; governance outcomes, funding terms, and execution quality could influence sentiment, but their effects remain uncertain.

A separate near-term focus is Horizon RWA’s transparency and net economics. Zeller’s audit argues headline revenue was flattered by incentives or inactive positions and characterizes the program’s “collector” as spending roughly $24 for each $1 earned, an assessment that, if borne out, would push the DAO to revisit KPIs, subsidy levels, and reporting granularity for RWA initiatives.

South Korea crypto influencer disclosure: rules, coverage, penalties

South Korea is moving to require social media investment influencers, including those covering crypto, to disclose both their own holdings and any compensation tied to the assets they promote, according to Blockonomi. The proposal frames undisclosed conflicts of interest as a driver of retail harm and aligns with international moves to formalize advertising and advice standards in digital markets.

Penalties for violations would be comparable to capital-market crimes such as price manipulation, according to MEXC. Lawmaker Kim Seung-won has positioned the amendments as a way to curb misleading “finfluencer” behavior and to bring advisory-like activity into a clear compliance perimeter, with the details of enforcement to be clarified during the legislative process.