BGD Labs, the longstanding service provider that developed Aave’s hugely successful v3, has decided to cease its contribution to the Aave DAO.
A post on Aave’s governance forum states that, upon conclusion of its current engagement on April 1, BGD Labs will not be seeking to renew its contract with the DAO.
The news is the latest in a string of disagreements between Aave DAO members and Aave Labs, kicked off in December last year by the discovery that Labs had diverted front-end swap fees.
Read more: Aave Labs faces backlash over CoW Swap integration
Aave’s former CTO Ernesto Boado spun off BGD Labs as a service provider to the DAO in 2022, believing in an “organisationally-decentralised Aave ecosystem.”
However, the post cites an “asymmetric organisational scenario,” around Aave Labs’ increased involvement in direct development (i.e. of v4).
BGD Labs also sees difficulties in avoiding centralization given Labs’ “control of the brand and communication channels” and “important voting power to actually influence major Aave DAO votes.”
Read more: Aave brand dispute rumbles on as founder buys £22M London property
Other factors include a perceived snub of v3 in preference for Labs’ development of v4 and a lack of collaboration and feedback related to v3, which BGD Labs sees as “a waste of our potential.”
Reassuring users about the departure, the post states Aave’s “infrastructural components… are in a very mature stage, and we don’t envision any problem with them.”
DAO downfall?
Since tensions began to flare late last year, Boado has been vocal about Aave Labs’ overreach, authoring a proposal to transfer brand assets to the DAO.
Labs then unilaterally decided to push Boado’s proposal to a vote over Christmas, a move he called “disgraceful.” The proposal was rejected, with 55% NAY votes to 41% voting ABSTAIN.
The result suggested that Labs, along with aligned entities, controls enough voting power to carry votes, such as the recent narrowly rejected proposal to establish norms around voting wallet disclosures and conflicts of interest.
Last week, Labs proposed the “Aave Will Win Framework,” which would see all of Aave product revenue go to the DAO in exchange for up to $42.5 million of stablecoins and 75,000 AAVE.
Discussion of the proposal is ongoing and currently runs to 76 comments.
Aave’s founder, Stani Kulechov, who treated himself to a $30 million London mansion a month before the drama began, insists he’s buying the dip and has stated, “I respect BGD’s decision and I am sad to see them go. The DeFi ecosystem is better for having a team like BGD in it and I hope they continue to build and make contributions to the industry.”
DAO members’ reactions to BGD Labs’ departure have been shock and resignation.
ACI’s Marc Zeller called the loss “devastating,” stressing that “most of the revenue V3 generates today is driven by their code and innovations.”
Ezreal, the contributor who first drew attention to the diverted swap fees, simply stated, “actions cause reactions,” adding that “BGDLabs was crucial for the success of the protocol and governance.”
Aave’s governance token dropped 6% on the news. It is down over 40% since the Labs vs. DAO spat began, slightly more than ETH’s 35% drop over the same period.
Update 2026-02-20 1700 UTC: Updated this piece to Kulechov’s public post on the matter.
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Source: https://protos.com/aave-developer-bdg-labs-to-cease-contribution-after-dao-drama/
