Aave governance dispute escalates as ACI and Aave Labs publish dueling reports

CoinTelegraph

by Ezra Reguerra

February 25, 2026

AI-Generated Deep Dive Summary

A governance dispute within the Aave ecosystem has escalated significantly as two competing reports from rival groups present vastly different perspectives on protocol funding and accountability. The disagreement centers around a proposed $50 million funding package for Aave Labs, with stakeholders divided over how past contributions have been utilized and whether the proposal aligns with the best interests of the decentralized autonomous organization (DAO). The conflict gained momentum when Marc Zeller, founder of the Aave Chan Initiative (ACI), published a transparency report critiquing Aave Labs' historical funding and applying a return-on-investment framework to past DAO grants. This followed the release of Aave Labs' own contributions report, which detailed its role in building the protocol since 2017. Both reports aim to influence an upcoming vote on the "Aave Will Win" proposal, which seeks tokenholders' approval for up to $42.5 million in stablecoins and 75,000 AAVE tokens to fund Aave Labs under a DAO-funded model. The core issue revolves around transparency, accountability, and how revenue from Aave-branded products should be managed. Zeller's report questions the effectiveness of past grants and raises concerns about potential conflicts of interest, while Aave Labs defends its contributions as critical to the protocol's development. The dispute highlights broader challenges in DAO governance, including balancing centralized decision-making with decentralized principles. This matter is significant for crypto enthusiasts and blockchain projects because it underscores the importance of transparency in DAO operations and the delicate balance between fostering innovation and maintaining accountability. As Aave Labs seeks approval for its funding proposal, the outcome could set a precedent for how similar disputes are resolved in the future, impacting the credibility and sustainability of decentralized protocols.

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Originally published on CoinTelegraph on 2/25/2026