reading this post was difficult
this is a day for the DAO to be remembered, where
@bgdlabs made $AAVE multi billy.
the most heartbreaking breakup in defi to see BGD labs quit aave after 4 years
this should be required reading for anyone thinking DAOs solve governance problems
they've built basically everything: v3, governance infra, umbrella safety module, chain expansions
now they're walking away on the april 1st
what BGD said👇
1) organizational asymmetry got untenable
-
@aave pivoted from independent company building multiple products to central contributor pushing v4 as primary focus
- aave labs controls brand + communication channels + significant voting power
- can influence DAO votes through external leverage not just merit
2) v4 being promoted by trashing v3
- BGD built v3. it dominates defi lending. runs white-labels. generates vast majority of aave revenue
- aave labs promoting v4 through implicit/explicit criticism of v3, calling production system inadequate to justify new version
- BGD position: v4 could complement v3 for different markets. but campaign against current revenue engine while v4 isn't even live yet
3) zero collaboration but just demands
BGD never had any type of incentives to collaborate on v4
v4 developed solely by aave labs and this collaboration meant:
- aave labs invites one-way feedback
- never asked if v3 could already do v4 features
- BGD expected to provide unpaid advisory to separately funded initiative
4) adversarial toward improving v3
- BGD published doc showing v3 has strong lifetime + improvement room
- aave labs response was categorical criticism of continuing v3 improvements. push everyone to focus on their v4 (still not released months later)
5) proposed v3 deprecation timeline is aggressive
aave labs latest proposal:
- immediately pause new v3 features
- orient all service providers to v4 before it's even live
- 8-12 months post-v4 launch worsen v3 parameters to force migration
BGD feels its outrageous to make v3 parametrisation worse in order for v4 to shine on main revenue engine
with DAOs, problems like these always surfaces:
- aave labs has legitimate positional power (brand control, voting influence) but using it to centralize around their roadmap
- telling existing contributors pivot to our vision or leave while their product generates revenue and their own doesn't exist yet
- this is corporate power play disguised as DAO governance
what BGD is really saying:
- they've built the infrastructure that made aave successful. now aave labs wants them to either:
- one, work on v4 for free as collaboration
- two, stop improving v3 so v4 looks better by comparison
- three, leave
they chose option 3
watching what happens:
- if aave can seamlessly replace BGD and v4 launches successfully this validates aave labs' approach
- if v3 maintenance suffers or v4 delays continue BGD's departure looks prescient
- either way this resignation letter is case study in how DAOs centralize when one entity controls brand + distribution + voting power
- organizational decentralization only works if no single entity has enough external leverage to override technical merit
- aave labs has that leverage. BGD recognized it. left rather than operate under asymmetric constraints
aave want to prove organizational decentralization works even when major contributor leaves due to centralization concerns
aave v3 generates revenue. v4 doesn't exist yet.
https://x.com/arndxt_xo/status/2025077378951880823
