Aave’s management vote comes amid a $86M capital valuation
The governance dispute in the Aave ecosystem escalated after two detailed reports offered opposing interpretations of the protocol's past funding and a vote on a proposed $50 million package for Aave Labs.
Aave Chan Initiative (ACI) founder Mark Zeller published what he called a transparency report Wednesday that reviews Aave Labs' historical funding and applied the return-on-investment framework of past DAO grants. Hours ago, Ave Labs released a report of its own contributions from 2017, detailing its role in building the protocol.
The dispute centers on the “Aave Will Win” framework, a proposal that requires token holders to approve funding of up to $42.5 million in stablecoins and 75,000 AAVE (AAVE) tokens. In return, Ave Labs transfers 100% of its revenue from Aave-branded products to the Aave DAO treasury in a DAO-funded operating model.
The debate has gone beyond the amount of funding to include questions about accountability standards, revenue accounts and maintaining the protocol's core infrastructure.
It follows the recent announcement that major technical contributor BGD Labs will end its involvement with The DAO on April 1st.
Competing views on money and value
Zeller's report says Aave Labs achieved a lifetime capitalization of $86 million, including 2017 initial coin offering (ICO) proceeds, venture funding and DAO fees.
They argued that future DAO grants should be evaluated using measurable revenue impact and clear disclosure standards.
ACI, the Aave DAO service provider and not a neutral party in the dispute, questioned whether the management votes should be uncoordinated to distinguish between funding, revenue alignment and V4 approval.
Funding decisions should be tied to performance measures and clear reporting, Zeller wrote.
In its contribution report, Aave Labs highlighted its role in designing and shipping Aave V1, V2, and V3, and highlighted the protocol's current revenue model, including flash lending, a security module, and efficiency mode.
Aave Labs argues that counting management ideas or forum posts does not fully reflect the research, development, security and infrastructure work required to maintain a protocol used by millions of users.
What are token holders voting on?
Under the “Aave Will Win” framework, Aave Labs will transition to a DAO-supported operating model, including product-level revenue, aave.com and user-facing products leading to the DAO.
Related: Curve Finance founder says discord in DAO is healthy sign.
The proposal seeks approval of Aave V4 as the protocol's long-term technical foundation and outlines a new foundation plan to manage the Aave brand.
Some members of the community have previously raised concerns about the size of the support package and its voting power, including 75,000 AAVE tokens.
In the year
The snapshot vote, scheduled for Thursday, is the first off-chain vote to gauge community sentiment before any binding on-chain proposals are made.
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