Author: Xiaobing, Shenchao TechFlow
On October 2, Aave Labs submitted a seemingly unremarkable proposal on the governance forum: to establish a foundation company registered in the Cayman Islands, with no members and no shareholders, for the purpose of holding and protecting the Aave brand and related intellectual property.
The proposal was named "Aave Foundation, Phase One," and the AAVE token rose about 8% that day.
But what truly makes this proposal worth reading carefully is that it hints at a fact that makes many AAVE holders uncomfortable: to this day, the Aave brand, trademarks, and core domains are not in the hands of the DAO.
An Awkward Reality: The DAO Pays, Someone Else Holds the License
In the database of the United States Patent and Trademark Office, the registered holder of the AAVE trademark is Quantum Swan OÜ, a company registered in Estonia. The trademark was applied for in November 2018 and officially registered in August 2019.
Quantum Swan is affiliated with Aave Labs (the development company founded by Stani Kulechov), which means the protocol governed by the Aave DAO uses a trademark held by a private company.
This arrangement was common in the early days of DeFi: the team first registered the trademark, then gradually open-sourced and decentralized. But what makes Aave special is that the DAO has been operating for years, spending large amounts of funds on service providers to write code, build risk models, and develop frontends. Of the intellectual property produced by this work, some belongs to the DAO, some belongs to service providers, and the most core brand assets (trademarks, domains, social media accounts) have never belonged to the DAO.
In December 2025, the conflict erupted in full force.
DAO representatives proposed a radical proposal on the governance forum, demanding that Aave Labs transfer all brand assets, code intellectual property, GitHub repositories, npm packages, and social accounts to the DAO, and convert Aave Labs into an entity subordinate to the DAO. Aave Labs responded that the website and brand are owned by Labs, and what the DAO owns are the smart contracts.
The result of the tug-of-war between the two sides was the "Aave Will Win" framework in early 2026, in which Labs promised to include the brand custody issue in governance and promised that the AAVE token is the only core asset in the ecosystem.
This foundation proposal is the fulfillment of that promise.
What Exactly Is the Proposal Trying to Do?
The scope of the Phase One proposal is very narrow: register the entity, appoint initial independent directors and independent supervisors. That is all.
It does not involve the transfer of trademarks, the transfer of domains, or the transfer of code intellectual property. The actual transfer of all assets requires subsequent independent governance proposals and votes.
The foundation's legal structure has several key features worth noting.
No members, no shareholders. According to the Cayman Islands Foundation Companies Act, such entities can exist independently without any owners, legally hold assets, sign contracts, and engage in litigation. This solves a fundamental dilemma faced by a DAO: assets need a legal "owner," but there should be no one above the DAO.
Aave Labs cannot serve as a director or supervisor of the foundation. The proposal explicitly stipulates that Aave Labs, DAO service providers, and their affiliates are not entitled to appoint or serve as directors and supervisors of the foundation. After the initial appointments are completed, any change of directors must be decided by token holder vote through an AIP (Aave Improvement Proposal).
The DAO retains core control. Token holders, through governance, have the following powers over the Foundation: appoint and remove directors; have veto power over amendments to the bylaws, disposal of core intellectual property, mergers and reorganizations; require the Foundation to publicly report to the governance forum quarterly on its assets, operating expenses, and any trademark enforcement actions.
Brand licensing is one-way. The Foundation licenses the Aave brand to product developers for free, but this does not constitute control over protocol governance. The Foundation manages the brand, the DAO manages the protocol.
In the first phase, no recurring budget is established; only reasonable registration, legal, and personnel costs are requested. Any subsequent funding needs require a separate governance vote.
What problem does this design solve?
For the DeFi industry, this Aave proposal is more noteworthy than the rise or fall of AAVE.
Almost all mainstream DeFi protocols face the same problem: the code is open source, but the brand is not.
Uniswap's trademark belongs to Uniswap Labs, Compound's brand belongs to Compound Labs, and MakerDAO's brand assets once belonged to the Maker Ecosystem Growth Foundation, which later sparked a great deal of community controversy during the transition to the Sky ecosystem.
Open-source code means anyone can fork a protocol with exactly the same functionality. But without the brand, the forked protocol cannot use the original name, domain, and user trust—these are the protocol's greatest moats.
When the brand is held by a private company, there is an implicit power asymmetry between the company and the DAO: the DAO controls the protocol's parameters and funds, but the company controls the entry points through which users access the protocol (frontend, domain, brand recognition). Both are indispensable, but only the company has legal ownership of the brand.
The Aave Foundation's design attempts to break this asymmetry. By creating an "ownerless" legal entity to hold the brand, and then through governance mechanisms allowing the DAO to control this entity's personnel and major decisions, it achieves a nested structure in which "the brand has a legal owner, but the owner is accountable to the DAO in governance."
The first-phase proposal is clean enough: it only builds the shell, does not move anything, and leaves limited room for controversy. The real test comes in subsequent phases.
Will Quantum Swan OÜ transfer the trademarks unconditionally? The current proposal does not mention the consideration or conditions for the transfer. If Quantum Swan demands compensation, who bears this cost? If legal obstacles arise during the transfer, does the DAO have a backup plan?
How should the boundaries of code intellectual property be drawn? Aave's codebase involves contributions from multiple service providers. The proposal mentions "intellectual property transferred by service providers to the Foundation in accordance with the agreement," but which code belongs to the DAO (because the DAO paid for it), which belongs to the service providers (because they wrote it), and which belongs to Labs (because it was produced under an employment relationship with Labs)—this ownership question will inevitably spark discussion in subsequent phases.
This is not something that can be solved with a single vote. It is a phased governance project that may last for months. Each phase will return to the forum, and each phase can be vetoed by the community.
What does it mean for the AAVE token?
When Stani released the proposal, he said: "Let Aave's intellectual property belong to the DAO, and unify everything under one asset, AAVE."
The subtext of this statement is: when the brand, trademarks, domain names, and code intellectual property all belong to an entity governed by AAVE holders, the scope of the AAVE token's governance rights expands from "protocol parameters" to "brand and intellectual property." The token's governance boundary has expanded, and in theory its governance premium should also expand.
If the trademarks and domain names are successfully transferred to the Foundation, AAVE holders will truly become the "indirect owners" of the Aave brand. If the transfer process is blocked or significantly diminished, then this phase will have merely built an empty shell.
DeFi governance has come to this day, and it is evolving from "voting to decide interest rate parameters" to "voting to decide brand ownership." This is a more complex field, closer to traditional corporate governance, and it is also an issue that DAOs must learn to handle.
Aave took a step first. But this step only built a house. The move has not yet begun.
