The recent controversy surrounding Aave centers on a serious disagreement between its development team, Aave Labs, and its governance community, Aave DAO, over profit distribution. This conflict touches upon a fundamental question in the decentralized finance (DeFi) space: who truly owns the protocol, and who has the right to capture the value created by it?
This controversy goes beyond a clash of ideologies, bringing direct economic consequences and profound governance challenges:
The Token Value Capture Dilemma: If Aave Labs captures most of the revenue generated by Aave's product success outside the protocol layer, the value of the AAVE governance token becomes questionable. This means that even with increased protocol usage, token holders may not share in the corresponding value growth.
The Universal Dilemma of DeFi Governance: Aave's situation is not unique; it exposes the common problem of blurred lines of responsibility and benefits between protocols and products faced by many DeFi projects. In the early stages of a project, this ambiguity facilitates flexible development, but as the scale of interests grows, conflict becomes unavoidable.
