The Aave dispute, the glory of a DAO, and the discomforts of DeFi growing up

With a flare-up between the Aave DAO and Aave Labs, it's worth taking a look at what's made the money market the Godzilla of Defi

Brady Dale

Dec 21, 2025

Some controversy has broken out this week over the Aave protocol, as the Aave DAO accuses Aave Labs, the company that first developed the giant money market’s smart contracts, of siphoning off profits that should be going to the DAO.

This episode is much (much) less about that controversy, and much more about reviewing how Aave has come so far, what made the difference for it along the way (because it wasn’t always number 1, but it has been for a long time now) and where it’s headed.

After all, if people are fighting, that nearly definitionally means that there’s something worth fighting over.

I confess, for a long time, in Aave’s early years, I looked at it as the second fiddle to Compound, the pioneer of pooled liquidity in money markets. That’s just not a position one can maintain at this point, however.

No pod next Sunday. Next show on January 4.

(but there will be Tuesday and Thursday newsletters)

Thank you!

Some of you have been forwarding these newsletters around, and I could not appreciate that more.

Aave show notes

Here’s all the sources of sound I used in this episode, plus a bunch of other relevant materials I had a look at along the way as I prepped the episode.