BGD Labs (Bored Ghosts Developing), the primary development team responsible for building and maintaining key parts of the Aave protocol including Aave v3, governance infrastructure, security modules like Umbrella, and more, has announced they will cease contributions to the Aave DAO.
The announcement came via their post on the Aave governance forum. Their current service engagement ends on April 1, 2026, and they will not seek renewal or continue contributing beyond that date. This follows nearly four years of near-exclusive focus on Aave since BGD Labs’ founding in early 2022.
Reasons Cited by BGD Labs
They described an “asymmetric organizational scenario” where Aave Labs has increasingly centralized control over branding, frontend, roadmap especially pushing Aave v4, and strategic direction. This has created: An adversarial stance toward further meaningful improvements on v3 (the current dominant version with most TVL).
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Pressure to prioritize v4 development without adequate involvement from existing contributors like BGD. A governance environment that no longer aligns with decentralized principles or BGD’s operational values.
They viewed continued involvement as “nonsensical” and a potential waste of resources, given the shift away from the collaborative model they helped build. BGD will complete all current work; v3 maintenance, chain expansions, asset onboardings, security tasks until April 1.
They plan to publish handover documentation, maintenance guidelines, and supporting materials for the community/other contributors. To avoid risks during transition, they proposed a 2-month security retainer for incident response on v3, governance, and related systems—valued at around $200,000, pending DAO approval.
The AAVE token dropped around 6-8% reports vary slightly following the news, reflecting concerns over talent loss and governance tensions. Marc Zeller called it “devastating”; others warned of risks to the token and protocol stability highlighted this as potentially the most significant developer departure in Aave’s history.
Aave founder Stani Kulechov acknowledged the decision respectfully, noting sadness over their exit but appreciation for their contributions. Broader context includes recent proposals “Aave Will Win” from Aave Labs, offering DAO revenue shares in exchange for treasury funds, which some see as part of consolidating power.
Aave remains the leading DeFi lending protocol with over $25-27 billion in TVL per DeFiLlama, battle-tested, and revenue-generating. However, this highlights ongoing debates about centralization vs. true DAO decentralization in major protocols. This could be a stress test for Aave’s maturity—protocols that survive key contributor exits often emerge stronger if the community adapts effectively.
This reflects sentiment-driven selling tied to fears over lost technical expertise, potential governance instability, and questions about long-term protocol resilience. AAVE has been volatile amid recent governance debates, but the BGD news amplified downside pressure.
Protocol operations remain stable for now—BGD has committed to completing all ongoing work (v3 maintenance, asset onboardings, security tasks, chain support) until April 1. They plan to deliver comprehensive handover documentation, maintenance guidelines, and supporting materials to ease the transition for the community or new contributors.
To bridge potential gaps, BGD proposed a 2-month security retainer focused on incident response like Immunefi bug bounties, critical fixes for v3, governance and Umbrella. Valued at ~$200,000, this awaits DAO approval. Any delays in onboarding replacements could expose v3 to slower bug fixes or unaddressed vulnerabilities, though Aave’s battle-tested code and existing security layers mitigate immediate catastrophe.
BGD described themselves as having led or heavily contributed to nearly every major technical subsystem. Their exit creates a talent and knowledge gap, especially for v3 (still dominant with most TVL and revenue). Community figures like Marc Zeller (Aave Chan Initiative) called it “devastating” and “the most significant talent loss in Aave’s history,” while others warned of risks to token value and protocol edge.
The departure highlights escalating tensions between the Aave DAO (decentralized token holders) and Aave Labs (founder Stani Kulechov’s entity, controlling branding, frontend, and v4 roadmap). BGD cited an “asymmetric” shift where Aave Labs pushes v4 aggressively while sidelining v3 improvements and limiting input from other contributors.
This fuels debates on whether Aave is truly decentralized or drifting toward founder-led control. Aave’s ~$26-27B TVL has held steady so far, as the protocol remains revenue-generating and dominant in DeFi lending. However, prolonged uncertainty could slow growth, delay migrations to v4, or prompt outflows if perceived risks rise.
v4 Rollout
Aave Labs’ focus on v4 (modular architecture, new features) could accelerate without BGD’s v3-oriented input, but critics including BGD argue this risks destabilizing the live system. Successful v4 execution might offset losses by attracting new liquidity; failure could compound damage.
This serves as a stress test for DAO maturity. Protocols surviving key contributor exits often strengthen. But it could erode developer confidence in Aave’s model, making talent recruitment harder or more expensive. Stani Kulechov expressed respect for the decision, sadness over the exit, and appreciation for BGD’s contributions, noting the DeFi ecosystem benefits from teams like theirs.
Community voices emphasized BGD’s outsized role in Aave’s success and warned of risks to dominance. Aave remains the leading DeFi lending protocol—highly secure, revenue-positive, and deeply integrated across chains. The exit is a major setback, but not necessarily fatal if the DAO adapts quickly.
Monitor governance proposals, TVL trends, and AAVE price in the coming weeks for signs of stabilization or further stress. This could ultimately force positive reforms toward more inclusive decentralization.