AAVE Slumps Below $160 as Governance Vote Sparks Outrage

AAVE is one of the weakest-performing coins in the top 100 today, down 11% over the past 24 hours and nearly 18% for the week. The token slipped below $160, with trading indicators suggesting growing bearish momentum. On-chain data shows major wallets selling off large amounts of AAVE, with one whale unloading over $37 million worth in a single day.

DAO Proposal Sparks Backlash

The recent price drop comes during an ongoing conflict within the Aave community over a governance vote that went live on December 23. The proposal, authored by Ernesto Boado, aims to transfer control of Aave’s brand assets – such as domains and naming rights – from Aave Labs to a DAO-controlled entity.

The recent DAO alignment proposal has been moved to Snapshot after extensive discussion. We realize the community is very interested in a path forward and is ready to make a decision.

Time for tokenholders to weigh in and vote.https://t.co/QwoPeglhmU

— Stani.eth (@StaniKulechov) December 22, 2025

However, Boado has publicly stated that the version pushed to Snapshot was submitted without his approval. He claims the proposal was rushed into voting before community discussions were complete. Aave Labs has defended the move, saying the community is ready for a formal decision.

To be very clear:
– This is not, in ethos, my proposal. Aave Labs has (for whatever reason) unilaterally submitted my proposal to vote in a rush, with my name on it, and without notifying me at all. If asked, I would not have approved it.
– It was not my intention to submit the… https://t.co/JTWoMMNcQc

— Ernesto (@eboadom) December 22, 2025

Accusations of Poor Communication and Timing

Several Aave delegates and contributors criticized the process. Marc Zeller, founder of the Aave Chan Initiative, called the submission a “hostile takeover attempt” and highlighted concerns about voting timing, which overlaps with the holiday period and may reduce participation.

We acknowledge @aave unilaterally escalated the proposal to Snapshot without resolving discussion, without clear consensus, and without consent from @eboadom

We’ve posted our position in response to this unprecedented interference in the DAO governance process.

Worst outcome… https://t.co/80kEpYjikP pic.twitter.com/860GUfavvL

— Marc ”七十 Billy” Zeller (@Marczeller) December 22, 2025

Critics also pointed to recent shifts in voting power, with inactive delegates suddenly receiving new delegations. Some argue this could distort the vote’s outcome in favor of Aave Labs.

Founder Opposes the Proposal

Despite the push to move forward, Aave founder Stani Kulechov has stated he plans to vote “no”, citing the need for a more structured approach. He acknowledged the proposal has sparked division but said the vote is necessary to resolve mounting tension.

The vote is set to conclude by December 26. Its outcome may influence not only the control of Aave’s brand but also broader perceptions of its governance model.

Market Impact and Next Steps

AAVE’s price decline appears closely tied to the ongoing governance uncertainty. While the protocol remains one of the most used in DeFi, current investor confidence is clearly under pressure.

If the vote passes, it would mark a significant shift in how Aave’s core assets are managed. If it fails, further proposals are likely – possibly with clearer structure and broader support.