- AAVE crashed after a governance proposal on brand-asset ownership was rushed to a Snapshot vote.
- Senior delegates accused Aave Labs of bypassing the process and pushing the vote.
- Former CTO Ernesto Boado rejected the vote, saying it was escalated without his consent.
A governance dispute within the Aave DAO escalated on Monday after a proposal to govern the protocol’s brand assets was pushed to a Snapshot vote while debate was still ongoing.
The proposal asks whether AAVE token holders should regain control over domains, social media accounts, naming rights, and other intellectual property through a DAO-controlled legal structure.
The move followed roughly five days of forum discussion. Aave founder Stani Kulechov said the community was ready to decide and that proceeding to a vote would help bring closure.
However, several senior delegates and contributors disagreed, arguing that the proposal was rushed and violated established governance norms.
Former Aave Labs CTO and BGD Labs co-founder Ernesto Boado, whose name appears on the proposal, said it was escalated without his consent or notice. He publicly dismissed the Snapshot submission and said the discussion was still ongoing when the vote was initiated.
Accusations of Process Abuse
Marc Zeller of the Aave Chan Initiative said the proposal was unilaterally escalated without resolving outstanding questions raised by delegates and token holders. He warned that advancing the vote during the holiday period would limit participation from large holders and institutional voters, while also reducing the ability to redelegate voting power.
Zeller described the move as a hostile takeover attempt by Aave Labs. He said control over timing, escalation, and information flow can shape outcomes even when the vote itself follows written rules.
Aave Labs rejected the criticism and said the escalation followed the governance framework as written. The firm cited the minimum five-day review requirement for ARFC proposals and said no rule requires author approval before a vote proceeds.
It argued that extending the discussion beyond that window would deviate from the documented process.
Whale Selling Hits the Price
The governance escalation was followed by notable market volatility. According to CoinMarketCap, AAVE fell between 10% and 11% within 24 hours of the Snapshot vote being initiated, with the price dropping from the $176 range to around $152 at the time of writing.
On-chain data also shows that a large holder sold roughly $38 million worth of AAVE. The timing suggests heightened uncertainty among major holders. The same wallet continues to hold sizable positions in stETH and WBTC.
Related: Aave Price Falls Over 10% Despite Broader Crypto Market Recovery
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Source: https://coinedition.com/aave-drops-over-10-as-governance-vote-sparks-market-volatility/
