The Aave governance crisis continues to spook service providers and investors alike.
On March 3rd, Aave Chan Initiative, a major service provider, announced they will be leaving the Aave ecosystem in four months.
Similar to BGD Labs, who did the same thing last month, ACI explained they were leaving because Aave Labs is too controlling and doesn’t operate openly.
An independent service provider can’t function effectively when the entity receiving the most funding (Aave Labs) secretly controls voting and uses that power to approve its own suggestions.
Stani Kulechov, CEO and founder of Aave Labs, thanked ACI and Marc Zeller for their work but stated that their departure won’t impact the Aave ecosystem.
Everything with Aave is running smoothly, and rewards programs aren’t changing. Aave Labs is collaborating with other teams involved to ensure a seamless experience for users.
Even so, the broader community reactions were mixed, and investor confidence appeared low.
Impact on the AAVE market
The current problems with how things are run started in late 2025 when Marc Zeller from ACI claimed Aave Labs was improperly taking money and using the DAO’s name and image.
To compensate for past issues, Aave Labs asked the Aave DAO for $50 million initially, offering to share all future profits from any new products they develop together.
A recent proposal from Aave Labs was just barely approved, receiving only 52.58% of the vote. As a result, groups like ACI have announced they are withdrawing their support.
From where I’m sitting, it seems like Aave Labs has effectively taken the reins of the protocol’s future direction and key decisions, shifting control away from the DAO. While I believe Aave still has the potential to remain a leader in the lending space, this governance struggle has definitely shaken investor confidence in the short term.
The recent change regarding Aave’s involvement with ACI caused the price of the AAVE token to fall almost 10%, dropping from $127 to $107 on March 3rd.
Although the token’s price stayed between $100 and $130, a level it’s been at since February, analysis of large investor activity suggests underlying worries.
Data from Santiment shows that large AAVE holders – those with between 1 and 10 million tokens – have significantly reduced their holdings since late January. They’ve decreased their AAVE from 4.7 million to around 2.58 million tokens, almost cutting their position in half.
Final Summary
- Aave service provider ACI said it will exit the ecosystem in four months, further deepening the ongoing governance rift.
- Some investors appeared worried as key whales reduced their AAVE exposure by half in 2026.
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2026-03-04 16:08