Aave (AAVE) Management in Major Crisis: Caused Price Drop

BGD Labs, a core technical contributor to the decentralized finance (DeFi) protocol Aave, has announced it will end its collaboration with the Aave DAO after approximately four years of development and infrastructure work.

The company will cease its active role in the project when the current service agreement expires on April 1.

In a statement released at the forum today, BGD Labs stated that it had informed the community in advance to ensure a smooth transition process. The firm will continue its existing responsibilities throughout the contract period, including Aave v3, Umbrella, chain expansions, new asset integration, and security work. It also plans to release comprehensive documentation and maintenance guides to facilitate the takeover of its projects.

Founded in early 2022, BGD Labs has played a central role in building and maintaining Aave’s core infrastructure. The company specifically describes Aave v3 as the “crown jewel” of the ecosystem, stating that it has been a pioneer in its continuous improvement and expansion.

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BGD Labs also stated that it played an active role in establishing the protocol’s governance infrastructure, developing operational procedures, and setting up security mechanisms. According to the company, Aave’s core systems now have a “highly robust and future-proof” structure; the management infrastructure can operate for a long time without major changes.

BGD Labs’ decision to leave is reportedly driven by organizational and governance changes within the Aave ecosystem. A key part of this process is Aave Labs’ preparation to take on a more central role in Aave v4 development.

Aave Labs recently proposed that 100% of protocol revenue be directed to the DAO treasury while simultaneously requesting funding for development activities. BGD Labs, however, argued that this process creates an “asymmetrical organizational scenario.” According to the company, Aave Labs’ influence over branding, communication channels, and voting power poses risks to the principle of decentralization.

The company also described the approach to developing Aave v3 as “contested,” stating that a meaningful collaborative environment did not emerge during the v4 design process, and that contributors were only invited to provide consultancy without being encouraged or involved in the design process.

*This is not investment advice.

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