The second brother is cutting losses and clearing inventory. Can AAVE, which is deeply trapped in opposing emotions, still be bought?

Original Title: "The Second Largest Whale Sells Off, Can AAVE Still Be Bought Amidst Intensifying Opposition?"

Original Author: Azuma, Odaily Planet Daily

The leading lending protocol Aave is caught in a whirlpool of public opinion, with increasing opposition between the team and the community, which has objectively affected the confidence of token holders in the AAVE token itself.

Early this morning, aside from the project team, protocol contracts, and CEX, the second largest whale holding AAVE sold off 230,000 AAVE (worth about $38 million), causing a short-term drop of 12% in AAVE. It is reported that this "second largest whale" acquired the AAVE tokens at an average price of $223.4 from the end of last year to the beginning of this year, and the average selling price today was about $165, resulting in a final loss of $13.45 million.

· Odaily Note: The whale address is https://debank.com/profile/0xa923b13270f8622b5d5960634200dc4302b7611e.

Cause of the Incident: Dispute Over Fee Allocation

To clarify the community crisis Aave is currently facing, we need to start with a recent change in Aave's frontend.

On December 4, Aave announced a partnership with Cow Swap, adopting the latter as the default trading path for Aave's frontend exchange function (Odaily Note: previously it was ParaSwap), achieving better pricing through the latter's anti-MEV feature.

This seemed like a normal functional upgrade, but the community quickly discovered that previously, when using ParaSwap, the additional fees generated by this function (including referral fees or positive slippage surplus fees) would flow to the Aave DAO treasury address, but after switching to Cow Swap, they were redirected to the Aave Labs address.

Community representative EzR3aL was the first to notice this change that Aave did not proactively mention. He questioned the Aave team in the governance forum and calculated that just tracking Aave's income flow on Ethereum and Arbitrum, this fee is expected to bring in about $200,000 per week, corresponding to an annual income of over $10 million------this means that Aave has transferred at least tens of millions of dollars in income from the community address to the team address without almost anyone knowing.

Core Controversy: Who Does the Aave Brand Belong To?

As EzR3aL's post gained traction, many AAVE holders felt betrayed, especially considering that Aave did not communicate with the community during this change and provided no disclosure, which somewhat suggests an intention to conceal this modification.

In response to community concerns, Aave Labs directly replied under EzR3aL's post, stating that there should be a clear distinction between the protocol layer and the product layer. The exchange function interface of Aave's frontend is entirely operated by Aave Labs, which is responsible for funding, building, and maintaining it. This function is completely independent of the DAO-managed protocol, so Aave Labs has the right to decide how to operate and profit… The income that previously flowed to the Aave DAO address was a donation from Aave Labs, not an obligation.

In short, Aave Labs' stance is that Aave's frontend interface and associated functions essentially belong to the team product, and the income generated from it should also be regarded as company property, not to be confused with the protocol and related income controlled by the DAO.

Once this statement was made, a heated discussion quickly arose in the community regarding the ownership of the Aave protocol and product. A well-known DeFi analyst wrote an article titled "Who Really Owns Aave?" (Who Owns 'Aave': Aave Labs vs Aave DAO), and BlockBeats also reposted the Chinese translation, which interested readers can refer to for supplementary reading.

On December 16, the conflict was further escalated. Aave's former CTO Ernesto Boado initiated a proposal in the governance forum, requesting that the control of Aave's brand assets (including domain names, social media accounts, naming rights, etc.) be transferred to AAVE token holders. The relevant assets would be managed through an entity controlled by the DAO (specific form to be determined later) and strict anti-encroachment protection mechanisms would be established.

The related proposal garnered nearly 10,000 views and hundreds of high-quality replies in the Aave governance forum, with various participants in the Aave ecosystem expressing their positions below the proposal. Although some voices argued that the execution plan of this proposal was not perfect and suspected of exacerbating opposition, the majority of replies expressed support.

Founder Responds, but the Community is Unconvinced

As community sentiment continued to heat up, Aave founder Stani appeared in the forum to respond, stating: "…… This proposal leads us in a direction that is detrimental to the Aave ecosystem. It attempts to simplify a complex legal and operational issue into a simple 'yes/no' vote without providing a clear execution path. Such complex issues should be handled through a specially designed structured process, achieving consensus through multiple interim checks and specific solutions. For the reasons stated above, I will vote against this proposal……"

From a business operation perspective, Stani's claim that the proposal is too hasty may not be wrong, but in the current discussion atmosphere, this statement can easily be interpreted as "the Aave founder disagrees with transferring brand assets to token holders," which clearly further intensifies the opposition between the community and the team.

After Stani's statement, some aggressive comments targeting Stani even appeared below the original post, while more users expressed their dissatisfaction through forums or social media. An OG user mentioned that he first considered liquidating his AAVE holdings, and a loyal AAVE supporter stated: "AAVE holders should realize that this is just another DeFi junk coin. It is neither better nor worse than other coins."

The latest community development is the aforementioned sell-off by the second largest whale, resulting in a loss of over $10 million.

Can AAVE Still Be Bought?

At that time, AAVE was still favored by top institutions like Multicoin Capital, with its strong brand reputation, substantial capital reserves, clear expansion path, and robust income and buyback flow proving that AAVE is a "true value coin" distinct from other altcoins.

However, in just two weeks, a public relations crisis spanning from fee allocation to brand control and team-community relations has rapidly shifted AAVE from being a "value coin representative" to the center of controversy, even landing on the short-term decline leaderboard under emotional impact.

As of the time of writing, Aave Labs has indicated under Ernesto's proposal that it has initiated an ARFC snapshot vote regarding the proposal, allowing AAVE token holders to formally express their positions to clarify the future development direction. The outcome of this vote and Aave Labs team's subsequent handling attitude will significantly influence Aave's community faith and AAVE's short-term price performance.

It is important to emphasize that this incident is not merely a "negative news" or "performance change," but a concentrated inquiry into Aave's existing governance structure and rights boundaries.

If you believe that Aave Labs will continue to align with Aave DAO's long-term interests, and that the current friction is merely a communication and process error, then the price pullback driven by emotions may be a good entry window; but if you think that the issues exposed by this controversy are not incidental, but rather structural contradictions arising from long-term unclear rights between the team and the protocol, and a lack of institutional constraints, then this turmoil may just be the beginning.

From a broader perspective, Aave's controversy is not an isolated case. As DeFi matures, with protocols generating real and substantial income, and brands and frontends beginning to possess commercial value, some structural contradictions between protocols and products, teams and communities will inevitably surface. Aave being pushed into the spotlight this time is not because it has made more mistakes, but because it has gone further.

The debate over fees, brand, and control extends beyond AAVE; it is a question that the entire DeFi industry will inevitably face sooner or later.

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