BGD to Leave Aave Citing Governance Tensions
The Defiant
by Jona JaupiFebruary 20, 2026
AI-Generated Deep Dive Summary
BGD Labs, a key contributor to Aave’s technology, announced its decision to stop working with the Aave DAO once its contract expires in April 2026. This move comes after four years of collaboration, driven by growing disagreements over the protocol’s future direction, particularly regarding Aave V4. The team highlighted increasing pressure to prioritize V4 development despite V3 being the current operational version. These tensions have led BGD to step back from its role in maintaining and building Aave’s infrastructure.
Aave is currently the largest decentralized finance (DeFi) protocol, with over $26.8 billion in total value locked, according to DeFiLlama. The release of V4 introduced a new “hub-and-spoke” architecture in November 2025, aiming to reshape DeFi lending by creating a more modular system. However, BGD expressed concerns about the focus on V4’s development while V3 remains critical for Aave’s operations. These disagreements have created significant governance challenges within the Aave DAO.
The decision by BGD Labs to leave Aave highlights the complexities of decentralized governance in DeFi. While Aave has been a pioneer in the space, its ability to maintain consensus among stakeholders has become increasingly strained. The departure of a major contributor like BGD underscores the importance of balancing innovation with stability in protocol development. As Aave continues to navigate this transition, the broader DeFi community will closely watch how these governance tensions impact the protocol’s future and its position as a leader in the sector.
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Originally published on The Defiant on 2/20/2026