DAOUSDT
DAO Maker / Tether USD
crypto Composite

Very interesting. Suho.eth seized Build Finance DAO governance with 5K BUILD tokens (<5% supply), proposing/passing a control transfer via low quorum, 24-hr vote window, no strong safeguards like alerts or high thresholds. Founders couldn't stop it due to no veto in decentralized setup, failed alert discord bot, and zero opposing votes in short time.

You guys still remember the Build Finance DAO hostile takeover?
Attacker took over the DAO, used it to mint tokens, and then dumped the tokens.
https://www.theblock.co/post/134180/build-finance-dao-suffers-hostile-governance-takeover-loses-470000
Sometimes DAOs work, and sometimes it ends up like this.

DAOs are mostly a failure.
DAO tokens are not stocks. They give no ownership rights, unlike shares in a corporation.
And as a vehicle for 'democracy', they're also bad, as votes are given to delegates with the most tokens, which may not be anything meritocratic or based on contributions to the project. This is unlike open source projects that govern themselves via purely social consensus.
Many DAOs are just vehicles for delegates to raid the DAO treasury via grift schemes.

My previous post, “[Altcoin Season Is Canceled](https://www.reddit.com/r/CryptoCurrency/comments/1pr0d56/altseason_is_canceled_forever)” got 240K views. Clearly, many people are wondering what is happening with altcoins and what their future looks like.
Most commentators debated whether we actually had an altcoin season at all. One user, u/MaximumStudent1839, identified my pain point and argued that the whole "ownership", "equity", and "cash flow" was misleading and "brain hemorrhage". His view was simple: tokens should be treated as store-of-value assets driven purely by consensus. No future cash flows, no fee growth, no usage-based valuation. Just owning tokens based on their role and necessity within a given blockchain. Bullish on network-effect assets and bearish on some DeFi tokens, "ICM" tokens, etc.
In that framing, crypto is not a security, registered or unregistered. It is a collectible, sometimes with utility tied to an adjacent protocol.
While I was responding to comments, Stani, the founder of Aave landing protocol, was effectively demonstrating how this theory plays out in practice.
The moment the SEC dropped its investigation early Dec '25, Aave Labs switched the swap provider on its frontend and redirected fees away from the DAO. The amount is not huge - $10m, roughly one ninth of total Aave fees. Still, the principle matters. AAVE token holders do not benefit if fees accrue anywhere outside the DAO treasury.
This raised a key question. Should the DAO control all Aave IP and all fees generated by its storefront? Some may think this is not very important, but what if storefront fees eventually exceed protocol fees? AAVE holders should care where value is created and where it flows.
The vote happened, and Stani voted against the initiative, carrying about 33% of the voting power. Days before the vote, he spent roughly $12M buying AAVE. Good for price, bad for decentralization. Other large holders abstained. And realistically, why would they vote against the founder? He is responsible for their gains and has the most skin in the game.
Now consider the real risk. What if tomorrow there is a decision to funnel protocol fees to another wallet and cut off the DAO entirely? Would the minority be able to unite and vote against it?
DAOs are a compelling idea, but in practice the founding team has the final say. If they decide to sell the labs, as we saw with Axelar, Padre, and Tensor, token holders have no real way to intervene.
So you can throw most of the decentralization and governance narrative out the window. It does not work in the real world. Like communism, it sounds good on paper. When trying to make everyone equal - someone will always be more equal than others.
To be precise, it does work, just not the way it is advertised. DAOs simplify corporate governance, make it transparent, and put voting onchain. But they only cover the technical layer of governance, not ownership or control.
At the end of the day, crypto tokens function like unregistered securities. The best outcome we can realistically hope for is that the current SEC administration under Paul Atkins carves out a niche with more relaxed rules for digital securities.
That would simplify development and further integrate TradFi. At the same time, it would likely compress valuations, as criminal and scam capital would be forced out toward privacy chains that even most DEXs do not support.
Forget about altcoin season. Forget about “the next cycle.” Pumps will still happen, but only for a select few, mostly new tokens with the right timing, the right narrative, heavy marketing budgets, and VC or cabal bundling. Do not hold, and definitely do not DCA into any project tokens.
2024–25 taught me that, in the long run, capital preservation matters more than capital growth. In 2026, I’m bullish on L1/L2 ecosystems and platform tokens with strong network effects, and bearish on most project coins.
Merry Christmas and Happy New Year.

So in summary .....
Aave Labs is quietly transferring IP, frontend and future fee streams into an equity-only entity; the Christmas-period “token-alignment” vote formalises that DAO/token holders own nothing.

Revenue is already being re-routed (swap-adapter skim, v4 vault curator) while founder publicly re-bought then can sell again once governance capture is locked.

Risk/reward is now binary and skewed down: if the vote passes AAVE becomes a hollow governance token—sell now, re-enter only if “No” wins decisively.

This just gives competitors like Compound or Maker an edge while holders get sidelined, no wonder people keep mentioning Noones when DAO trust breaks.

None of this is financial advice. This is a (likely biased) summary of events and the perspective of an AAVE token holder.
**TL;DR:**
1. You will own nothing and you will be happy (even if you paid for it).
2. Aave Labs (Avara) is rug‑pulling the AAVE DAO and AAVE token holders.
More serious TL;DR: Aave Labs is acting in bad faith and is seriously misaligned with the interests of the DAO and thus token holders. There is no reason to believe the token is going to accrue any further value in the future as Aave Labs legally owns the IP and is attempting to drive revenue to its equity at the expense of token holders, who funded the entire thing.
Now the “too long” part:
AAVE is the largest decentralized lending protocol according to DeFiLlama based on TVL, having stood the test of time so far. AAVE started as ETHLend during the ICO mania, with the ICO sale funding the creation of the protocol and promising token holders any future upside, with an initial supply of 1.3 billion tokens. The protocol then rebranded to AAVE with a 100 LEND : 1 AAVE conversion, resulting in 130M tokens, plus 30M additional tokens for the team. The team behind AAVE, now labelled as Aave Labs under Avara, created v3 of the protocol, retro‑funded by the DAO to the tune of 15M.
It all began with the replacement of a swap adapter in the AAVE UI. The ParaSwap adapter, which routed positive slippage to the DAO, was replaced with a CowSwap adapter that charges an extra 0.25% fee, which was routed to a private wallet controlled by Aave Labs (Avara). This change was made without any notification to the DAO, citing two reasons:
* The DAO does not own the frontend.
* The new swap adapter improves execution for the end user.
It has already been shown that the swap adapter’s 0.25% fee results in worse execution for the end user by [TokenLogic’s analysis](https://governance.aave.com/t/velora-cowswap-integration-analysis/23620). Thus the only reason is extra revenue to the Aave Labs (Avara) entity, bypassing the DAO and flowing to Avara equity holders.
This is where confusion arises, as the DAO and token holders expected ownership of the UI, with the UI expected to be part of the AAVE v3 retro‑funding. Aave Labs’ (Avara’s) stance on their ownership of the UI has raised the question of who owns the frontend and the IP.
Post AAVE v3 launch and transfer to the DAO, Aave Labs underwent a rebranding to Avara, where the founder of the Aave protocol pivoted to focus on Lens (a decentralized social media project) and Family Wallet. The AAVE founder sold their entire public AAVE allocation, thereby exiting their public AAVE position. Under the stewardship of the DAO, the AAVE protocol has made massive strides, overtaking Maker and Lido to become the top DeFi protocol based on TVL. Following the failure of Lens and Family Wallet, Avara is now back engaging with the AAVE DAO and working on a v4 instance.
Since the return of Aave Labs (Avara) to the AAVE DAO, they have been consistently trying to route funds to Aave Labs. There was a launch of the Horizon Market, which was positioned to be “Aave for RWA only.” However, Labs wanted to incentivize the Horizon market with AAVE tokens from the DAO treasury, while creating a new token for the new market that would earn 80% of the Horizon revenue. With a majority of the AAVE DAO considering this as creating a rival token, the DAO voted against this proposal.
Then 20M in funding was requested to create a v4 instance of AAVE. In spite of most of the DAO considering this expensive, given Aave Labs’ (Avara’s) past reputation this proposal went through. In the v4 build, a new vault logic (similar to Morpho) was introduced, where the curator can re‑route revenue to their own public wallet.
Currently, the AAVE DAO makes around 130M in revenue from two major sources: a small percentage of the lending rate set by the DAO, and a slightly bigger chunk from liquidations, also set by the DAO. The new vault logic allows the curator to get a slice of the lending rate and also optimizes liquidations.
Given the uncertainty regarding ownership of IP and the frontend, the v4 instance has opened a can of worms where future revenue to the DAO could be siphoned to Aave Labs (Avara), as they control the frontend and thus the main gateway to the protocol.
Given the existence of Aave Labs’ (Avara’s) equity, this has created a clear conflict of interest between equity holders (Aave Labs/Avara VCs and employees) and token holders (the AAVE DAO).
Since the start of the discussion around Aave Labs’ (Avara’s) stealth diversion of revenue, Aave Labs (Avara) has consistently deflected from answering straightforward questions regarding ownership and future revenue to token holders. Aave Labs has been using the AAVE brand, built with funding from ICO participants (i.e., AAVE token holders), to promote their own products that will only route revenue to Aave Labs (Avara).
The Aave founder came out and said that the [DAO cannot own anything](https://x.com/StaniKulechov/status/1999459249513181592?s=20).
Since the start of the discussion around IP ownership, the AAVE social media handle, which is under the control of Aave Labs (Avara), has never posted any information regarding the [discussion in the forum](https://governance.aave.com/t/arfc-aave-token-alignment-phase-1-ownership/23616/163?u=maybeyonas).
However, Aave Labs (Avara) has effectively hijacked the forum discussion and sent it to a vote during a festive time, when many DAO members were on break. It is worth noting that the AAVE handle did post about the vote, raising the suspicion that Aave Labs engineered keeping the forum discussion in the shadows while rushing to a vote.
Aave Labs (Avara) employees have been very vocal about this on Twitter. Aave Labs’ ownership of the IP means Aave Labs (Avara) employees are spreading misinformation regarding what the DAO is entitled to and not, while also masquerading as AAVE employees, when they are actually Aave Labs (Avara) employees.
The Aave founder has virtue‑signalled by buying 10M worth of AAVE tokens, while in reality this appears to have been in preparation for the vote. There have also been indications of new bot accounts popping up on the forum, plus in the [snapshot vote](https://snapshot.org/#/s:aavedao.eth/proposal/0xbc606159ddeae0184c2086055637d3f357351ec0adc4c9f4150751bc41918eba/votes), most of the votes against IP transfer have been from wallets that have never voted in the past.
The reason for posting this is that most of the info on Twitter, especially from accounts with AAVE logos, has been misinformation and misrepresentation. The real discussion is happening in the forum, where only hardcore users are engaging.
The IP issue is real, especially with the recent acquisition of Axelar by Circle.
Aave Labs’ (Avara’s) ownership of IP means they can change the underlying protocol as they wish to drive revenue to their own equity holders. Moreover, another entity could come in and buy the IP, with all proceeds of the sale going to Aave Labs (Avara), while AAVE token holders have no say.
So if you hold AAVE tokens — which was probably the only respectable DeFi token — it is not likely to have any future use cases, revenue flow, or ownership of the IP. Moreover, after the vote on IP, which will be ending tomorrow (Dec 26), the founder is very likely to sell his tokens (yet again).
Do what you must.
Once again, this is not financial advice. This is just an attempt to capture what is going on in the forum versus what is being represented on Twitter.
Apologies for the bias as an AAVE holder.
Links:
1. Cowswap Adapter Discovery - [Forum Post](https://governance.aave.com/t/aave-cowswap-integration-tokenholder-questions/23530/112)
2. TokenLogic Cowswap Adapter vs Paraswap(Velora) comparison - [Forum Post](https://governance.aave.com/t/velora-cowswap-integration-analysis/23620)
3. Discussion on IP ownership - \[[https://governance.aave.com/t/arfc-aave-token-alignment-phase-1-ownership/23616\]](https://governance.aave.com/t/arfc-aave-token-alignment-phase-1-ownership/23616])
4. ACI Position - [Twitter Post](https://x.com/Marczeller/status/2003359969798947056)
5. Aave Employee Position - [Twitter Post](https://x.com/alphaleaked/status/2003081282998452672)
6. The Block reporting - [Blog](https://www.theblock.co/post/383464/aave-labs-vote-sparks-community-outcry?utm_source=twitter&utm_medium=social)
Linking opinions of some people who i think are at the forefront of DeFi on Ethereum
1. Spark.Fi growth - [Twitter Post](https://x.com/MonetSupply/status/2003519950632456566)
2. Aave CoFounder - [Twitter Post](https://x.com/JordanLzG/status/2003074619629359169)
Also linking this random rage baiter, as they generally are replying under the pro AAVE DAO posts - [Twitter Account](https://x.com/Davehgow/with_replies)