BGD Labs to cease Aave contributions after four years as governance tensions grow

BGD Labs, a core technical contributor to the Aave DeFi protocol, said it will cease its involvement with the Aave DAO after its current service engagement concludes on April 1, ending nearly four years of development and infrastructure work on the lending platform.

In a forum post on Friday, the firm said it is informing the community in advance to ensure a smooth transition, noting it would continue its existing responsibilities — including work on Aave v3, Umbrella, chain expansions, asset onboarding, and security — until the end of its contract. BGD Labs also said it plans to publish documentation and maintenance guidelines to help other contributors take over its projects.

BGD Labs has played a central role in building and maintaining Aave's core infrastructure since its founding in early 2022, leading or contributing to many of the protocol’s core technical subsystems. The firm described Aave v3 as the "crown jewel" of the ecosystem, which it has continuously improved and expanded, and said it helped establish governance infrastructure, operational procedures, and safety mechanisms that underpin the protocol's operation.

The company said it believes Aave's core systems are now in a "very solid and future-proof state," with governance infrastructure that "just works" and can function indefinitely without major changes.

Governance tensions

BGD Labs said its departure reflects a broader shift in Aave's organizational and governance environment, particularly as Aave Labs — the startup that originally built the protocol — moves to take a more central role in developing Aave v4 and other initiatives.

Aave Labs recently proposed directing 100% of protocol revenue to the DAO treasury while requesting funding to support its development work, part of a broader restructuring that would also place Aave's intellectual property under a new foundation and prioritize the rollout of Aave v4. The proposal calls for coordination between the DAO and Aave Labs on future development and suggests deprioritizing new feature work on v3, with a gradual wind-down of v3 beginning 8 to 12 months after v4 launches, including measures intended to encourage migration.

BGD Labs said these developments contributed to what it described as an "asymmetric organizational scenario," where Aave Labs' control of the brand, communications channels, and voting influence created centralization risks within what it views as a decentralized ecosystem. 

The firm also criticized what it characterized as an adversarial approach toward improving Aave v3 and a lack of meaningful collaboration around v4 development, stating that contributors were asked to advise on v4 without incentives or involvement in its design.

"In summary, we stop contributing because the environment no longer aligns with how we operate and where we see our value," the firm wrote.

Despite its departure, BGD Labs said it would help ensure continuity during the transition. It proposed a two-month optional security retainer from April through June 2026, under which it would remain available to respond to security incidents affecting Aave v3, governance systems, and related infrastructure. The proposed retainer would cost $200,000 and would require approval through a governance vote.