BGD Labs, a key player behind the development of Aave“s successful v3, has announced that it will cease its contributions to the Aave DAO. This decision, communicated via a post on Aave”s governance forum, indicates that BGD Labs will not seek to renew its contract after April 1. This marks a significant development in the ongoing tensions within the Aave ecosystem.
The conflict has its roots in a series of disputes that began in December, when it was revealed that Aave Labs had redirected front-end swap fees, raising eyebrows among DAO members. BGD Labs, which was established in 2022 by Aave”s former CTO Ernesto Boado, aimed to foster a decentralized organizational structure within the Aave ecosystem. However, concerns over an “asymmetric organizational scenario” have emerged, particularly regarding Aave Labs” growing influence in direct development efforts, such as the upcoming v4.
BGD Labs expressed apprehension about potential centralization issues, highlighting Aave Labs” control over brand communication and significant voting power that can sway critical DAO votes. Additionally, BGD Labs has voiced dissatisfaction with the perceived sidelining of v3 in favor of v4, citing a lack of collaboration and feedback as a missed opportunity for maximizing their contributions.
Despite these challenges, BGD Labs reassured users that Aave”s infrastructural components remain robust and mature, suggesting minimal impact from their departure. However, this exit raises questions about the future of the DAO and its governance structure.
The ongoing friction has not gone unnoticed. Boado has been vocal about the perceived overreach of Aave Labs, even proposing the transfer of brand assets to the DAO. A controversial move by Labs to push this proposal to a vote during the holiday season was met with significant backlash, ultimately resulting in its rejection. This incident highlighted the control Aave Labs and its affiliates have over the voting process within the DAO.
In a recent proposal, Aave Labs introduced the “Aave Will Win Framework,” which suggests that all product revenue would be directed to the DAO in return for a substantial amount of stablecoins and AAVE tokens. This proposal is currently under discussion, with numerous comments reflecting the community”s engagement and concern.
Reactions to BGD Labs” departure have been mixed, with some DAO members expressing shock. Marc Zeller from ACI labeled the loss as “devastating,” emphasizing the crucial role of BGD Labs in driving revenue for v3. Others, like contributor Ezreal, noted the inevitability of consequences stemming from actions taken within the governance framework.
In the wake of this announcement, Aave”s governance token experienced a decline of 6%, reflecting broader concerns about the project”s stability amid ongoing governance disputes. The token”s value has dropped over 40% since tensions escalated, outpacing declines seen in other major cryptocurrencies.
As the situation develops, it remains to be seen how the Aave community will navigate these challenges and what implications BGD Labs” exit will have on the future of the DAO.
