The price of AAVE surged 8% on Friday following the release of a new proposal by Aave Labs that aims to place protocol intellectual property under decentralized autonomous organization (DAO) control. During the session, the token climbed above $182, briefly reaching an intraday high of $187.50 after starting the day near $171. The upward movement triggered approximately $350,000 in short liquidations across three key exchanges during a single hourly swing.
According to Aave founder Stani Kulechov, the plan is designed to hand over Aave intellectual property to the DAO, unifying assets under the AAVE token as part of the broader Aave Will Win framework.
Foundation Proposal Details and Structure
The proposal outlines the creation of a memberless Cayman Islands foundation company that would hold the Aave trademark, related trademarks, and protocol intellectual property. The entity may also hold primary domains and assigned intellectual property rights associated with service providers.
Phase 1 of the plan focuses strictly on incorporation and the appointment of an independent director and supervisor. Subsequent trademark, domain, and codebase transfers would require additional governance proposals and approvals. During this initial stage, the DAO would cover reasonable incorporation, legal, secretary, and appointment fees.
The planned foundation would not possess any voting, veto, or advisory roles regarding standard protocol governance. Tokenholders would retain full authority over listings, parameter changes, budgets, service providers, and framework modifications. However, the DAO would have the power to appoint or remove directors through an Aave Improvement Proposal (AIP) and maintain binding control over major constitutional changes, key intellectual property sales, restructuring, and future wind-ups. Additionally, the foundation would be required to issue quarterly reports detailing assets, expenditures, and legal proceedings.
Governance Process and Broader Developments
Before any entity is created, the foundation proposal must navigate the Aave governance process. If consensus is reached, it will advance to a Snapshot vote and subsequently to an AIP addressing incorporation costs, with later phases addressing the transfer of trademarks, domains, and codebase intellectual property.
The governance activity coincides with other protocol developments, including the recent expansion of Aave V4 on Base featuring a tokenized equities lending market that allows seven Coinbase-issued stock tokens to serve as collateral for USDC loans outside the United States. Furthermore, discussions regarding Aavenomics 3.0 have included talk of a permanent AAVE burn mechanism, though no formal proposal has been approved.
