Unchained: Uneasy Money — How Aave Labs and the DAO Should Split Ownership of the Brand

Host: Laura Shin
Guests: Kane (co-host), Taylor Monahan (Security at Metamask), Mark Zeller (Aave Chan Initiative / Aave DAO delegate)
Date: January 12, 2026

Episode Overview

In this lively episode of "Uneasy Money," Kane and Taylor are joined by Mark Zeller to dissect the current controversy over who truly controls the Aave protocol—Aave Labs or the decentralized Aave DAO—and, more broadly, the challenges and lessons for protocol and brand ownership in DeFi. The trio delves into the recent spat over protocol fees, brand asset control, and governance between Aave's core team and the broader DAO, using Aave as a case study for DAO maturity, governance clarity, and the future of decentralized protocol development.

Later, the conversation veers into the challenges of capital formation and community incentives with Infinix, the messy realities of on-chain prediction markets, debates around "insider trading," and closes with reflections on Ethereum's ethos and founder influence versus ecosystem neutrality.

Key Discussion Points & Insights

1. Aave DAO vs. Aave Labs — The Governance Showdown

Background ([03:24])

• Aave, as a top DeFi protocol, is an example of DAO governance done fairly well, with both strong leadership from Aave Labs (Stani) and active, independent DAO representation (Mark/others).
• The Incident: Aave Labs switched front-end swap integrations and rerouted significant fee revenue (low 8-figures) from the DAO treasury to the Labs' multisig wallet without a governance vote or community discussion.
• Community Uproar: This move prompted outrage among token holders, raising urgent questions of:
  • Who should "own" protocol-generated fee revenue?
  • How should brand assets (names, domains, IP) be controlled?
  • What are the right checks and balances between Labs (builders) and the DAO (governors)?

Escalation ([07:08])

• Forum Proposal: The former Aave CTO (now BGD Labs) proposed transferring brand assets, domains, and IP to a legal entity representing the DAO, then delegating operational rights to Aave Labs.
• Underlying Tension: It's not just about the immediate front-end fee revenue ("less than 10% of Aave local revenue" per Mark [09:37]), but about strategic asset control and ensuring no future party (even Aave Labs) can unilaterally redirect revenue or brand value—much like the MyEtherWallet/MyCrypto split of the past.

Legal & Structural Wrangling ([10:19])

• Mark observes that other top protocols (e.g., Lido, Morpho) have legal wrappers or nonprofit structures owning their IP/brands for DAO and community protection.
• Key Point: Ownership and legal clarity grow in importance as a project becomes a major business with "hundreds of millions of dollars per year" in play.
  • "You need to have a framework that is safe for every actor’s best interest... a neutral legal wrapper that is the DAO that will own the asset... ultimate ownership belongs to the DAO." (Mark Zeller, [13:09])
  • The priority is avoiding asymmetric power and arbitrary discretion over revenue and product direction.

Outcomes & Path Forward ([22:24], [28:26])

• Proposal: Transfer brand assets to DAO control, set formal mandates (legal and operational) for Aave Labs.
• Current Status: A brand transfer vote failed; Aave Labs has since committed (publicly) to sharing off-protocol revenue with AAVE holders—but trust and clarity require legal obligation, not just good faith.
• Mark remains optimistic that the relationship will stabilize around a mutually beneficial “Nash equilibrium,” balancing incentives for the DAO and Labs/founders, learning lessons from governance bumps along the way.

"Nobody is against Aave Labs doing their work... But what we want is clarity about the structure and to say, okay, if you do things and you use the AAVE brands, the DAO should get their fair share. ...We want something stable that creates trust and brings clarity to everyone involved."
— Mark Zeller ([20:43])

2. Lessons from Protocol History & DAO Maturity

Comparison to Early Days ([15:29])

• Taylor recounts the MyEtherWallet/MyCrypto split to show the risks of asset ambiguity—early open source efforts worked fine, "committing directly to master on GitHub" with just friends, but as value, users, and risk escalated, ambiguity led to messy, painful disputes.
• "As things evolve and get more serious and there's actual revenue, then you cannot just sit down and say, ‘Everything's going to be all right and we'll all be friends forever.’ It's part of becoming an adult." (Mark Zeller, [17:12])

Governance Needs & DAO Clarity ([18:22])

• With regulatory uncertainty (SEC, etc.) declining, actors are more willing to assert rights, test boundaries, and challenge each other's assumptions about value entitlement and control.
• Both financial and operational risk is amplified by uncertainty around governance structure, ownership, and incentive alignment.

3. Front-ends, Builders & Sustainable Incentives ([31:44])

• The group highlights that front-ends are where user relationships (and fees) reside, yet most protocols have weak models for incentivizing independent or multiple front-ends.
• Ongoing Debate: Should the operator of the main front-end (often Labs/founders) deserve the lion’s share of revenue? How to avoid perverse incentives—or effective “capture”—if the DAO doesn’t govern key distribution channels?
• Mark advocates for bringing back Aave’s old referral program, redirecting protocol revenue to incentivize a diversity of builder-operators.

"If you want to have great front ends and great experiences for users, you have to reward those things. Because they need to be able to build a sustainable business serving users and the protocol."
— Taylor Monahan ([32:24])

4. Capital Formation, Token Sales, & Community FUD — The Infinix Saga

([37:21])

• Kane recounts launching Infinix with an NFT-heavy, on-chain ICO model: "ICOs are a much better way of raising capital... airdrops just created the most perverse bad incentives."
• The campaign was quickly derailed by bot farms, hyper-cynical participants, and FUD cascading from the toxic Kaito-forum culture. Attempts to tweak sale parameters (participant caps, unlocks) only multiplied accusations of unfairness and "rugging."
• Mark critically observes that much of the new DeFi culture is "garbage," with reply-bots and yield farmers providing little added value, making fair on-chain capital raises nearly impossible in the 2026 environment.
• Kane admits, in hindsight, the best path might have been to "just pay out the bots, let someone else get wrecked," rather than trying to reform the system midstream.

"Crypto is adversarial. If the game theory is bad, the game will be lost... I was blaming not the players, but the game."
— Mark Zeller ([48:26])

5. Prediction Markets, Information Asymmetry & Insider Trading Debate

Purpose of Prediction Markets ([52:26])

• Kane, a self-described crypto prediction market "anarchist," argues these markets exist to aggregate and expose all information—insider or otherwise—to public view, not to replicate sports betting.
• Financial theory: The faster information reaches the market, the fairer and more useful the market is for everyone.

Is It Insider Trading? ([54:51] Onwards)

• "If you…think you’re just doing sports betting, I’m sorry but you're a fucking idiot… The entire point [of a prediction market] is that someone with more information might take your money." (Kane, [60:31])
• Most so-called "insider trading" on prediction markets is not legally or ethically equivalent to securities insider trading, as information is not about expropriating company secrets but rather about making better public predictions.
• The infamous "Maduro abduction bet" on Polymarket is dissected. Taylor points out most Twitter sleuths mischaracterize it; there's no proof it was actually "insider trading" or perpetrated by an intelligence official.

The Law vs. Market Efficiency ([65:39])

• Mark highlights three layers: (1) Economic/Informational benefits of market efficiency, (2) legal restrictions which often cannot be ignored, (3) practical company (or DAO) policies about employee wagering.
• The ideal system might not always square with the legal one; current laws could actually impede the intended value of prediction markets.

"There's fairness, there's philosophy, and there's the fucking law. And usually we have to follow the fucking law even if we don't agree with it."
— Mark Zeller ([65:39])

6. Closing Round: Ethereum's Purpose, Credible Neutrality, and Founder Influence

([76:47])

• The group digresses into Ethereum philosophy, citing Vitalik's recent defense of protocol resilience and credible neutrality vs. Kyle Samani's criticism.
• The hosts agree Ethereum's refusal to "pick winners," even when Vitalik personally doesn't like an app category (e.g., DeFi), is what allowed its ecosystem to flourish versus more top-down blockchains.
• Mark: "Some networks and some blockchains have [these values], some don't... The Aave DAO is very aligned with this."
• Kane: "The fact that Vitalik...is still out there advocating for the core principles of why he made it is super bullish. This is why we have founder-led entities."
• Taylor: "On Ethereum, a lot of things that Vitalik actively was like, this doesn’t exist in my worldview, made it. That is a good, solid platform."

Notable Quotes & Memorable Moments

• On Aave’s Brand Asset Dispute:

  "Maybe the DAO should have legal entity and own those brand assets and then delegate that back to AAVE Labs...so that those strategic assets cannot be monetized unilaterally."
  — Mark Zeller ([08:24])

• On DAO Governance Growing Pains:

  "It was fine in the early days, right... But, you know, once we got past ICO era, I mean really, even past the DAO, like, that was not fine anymore."
  — Taylor Monahan ([16:38])

• On Incentive Alignment and Recourse:

  "If there's something that breaks the trust between token holders and the labs for any kind of reason, there's less of an asymmetric relationship."
  — Mark Zeller ([13:09])

• On Information Asymmetry in Prediction Markets:

  "If you're participating in a prediction market and you’re like, ‘someone can't know information that I don't know’ — that is literally the entire point."
  — Kane ([60:31])

• On The Internet’s Cynicism:

  "The timeline is like so cynical, so burnt out, so cooked… someone turning up being like, ‘Hey, I'm going to sell you tokens cheaply.’ Like, there's just no belief whatsoever that that's not max extraction."
  — Kane ([40:13])

Important Timestamps

• [03:24] — Introduction to the Aave Labs vs. DAO governance conflict
• [07:08] — Brand & IP proposal emerges, community debate explodes
• [10:19-11:50] — Legal wrapper & precedent from Lido, Morpho, etc.
• [13:09] — Mark proposes DAO-held brand assets, delegation to Labs
• [16:38-18:22] — Lessons from early protocol history & need for governance clarity
• [22:24] — Brand transfer vote fails, Labs makes new revenue-sharing pledge
• [28:26] — Mark’s summary: “Phase 2” constructive path ahead
• [31:44-34:08] — Front end incentives discussion
• [37:21-52:21] — Infinix, Kaito, and game theory of token sales
• [52:21-72:09] — Prediction markets, information asymmetry, and insider trading debate
• [76:47-85:21] — Ethereum’s purpose, credible neutrality, EF/DAO builder relations

Summary Table: Key Issues in Protocol Governance

| Issue | Aave Labs | DAO / Community | Resolution Path | |------------------------------|----------------------|-------------------------------|---------------------------------------| | Swap Fee Revenue | Claimed as Labs' | Should belong to DAO, voted on | Brand/IP ownership mandates under discussion | | Brand & Domain Ownership | Controlled by Labs | Want DAO legal ownership | Proposal for DAO-controlled legal entity, with delegated Ops to Labs | | Incentives for Front-ends | Provided by Labs | Should be diversified, sustainable | Referral programs, clear revenue-share | | Legal Structure | N/A (ad hoc) | Precedent in Lido, Morpho | Adoption of nonprofit/foundation wrappers | | Community Trust | Fragile | Dependent on clear governance | Stable, non-discretionary models |

Episode Takeaways

• Clear legal and operational separation and mutual obligations are critical as DAOs and protocols scale; ambiguity breeds risk, drama, and mistrust.
• Front-ends are where user value accrues: Protocols must proactively incentivize diverse, robust user access points rather than delegating all power to original Labs/founders.
• Prediction markets require a clear user understanding of information asymmetry; legal and reputational norms must adapt, but the core function is to aggregate all available information as swiftly and openly as possible.
• Ethereum’s greatest strength is credible neutrality, and the ongoing ability for founders to advocate for original values even as the ecosystem grows beyond them.

For listeners who missed the episode:
Expect an unvarnished, sometimes combative yet always insightful roundtable on the present and future of decentralized governance, protocol branding, and the inescapable role of incentives, personality, and game theory in crypto’s evolution.