Aave DAO’s latest move against MakerDAO spurs fears of ‘walled gardens’ in DeFi

Users of Maker’s Spark protocol may soon be cut off from Aave DAO airdrops

article-image

Akif CUBUK/Shutterstock modified by Blockworks

share

In the past two months, Aave’s DAO has made a flurry of moves aimed to preserve alignment within the organization.

The market risk manager Gauntlet quit working with Aave DAO in late February after drawing criticism from the DAO for “moonlighting for direct competition.” Around the same time, Aave created a so-called protocol embassy on the Arbitrum DAO. This allowed Aave DAO members to delegate their Arbitrum governance tokens and have significant delegates or service providers vote on their behalf. Then in March, Aave’s community airdrop cut out users of the Morpho Aave optimizer, a protocol built on top of Aave that DAO members say draws revenue away from the base protocol. 

Read more: Aave tries a new round of airdrops targeting competitors

And on Tuesday, an Aave DAO proposal went up that would set the loan-to-value ratio for MakerDAO’s DAI stablecoin to 0%, essentially preventing DAI from being useful as collateral. 

There’s been a distinct premium placed on loyalty lately by the third-largest DeFi protocol. Some worry it may lead to a more segmented DeFi space.

The recent proposals have been largely led by the Aave Chan Initiative, a group that serves as the “primary delegate of Aave DAO.” The ACI was founded by Marc Zeller, who previously led integrations at Aave, which is now known as Avara. 

Read more: Aave Companies is rebranding to Avara

When reached for comment, Zeller said Gauntlet has proven to be unnecessary for Aave, and the protocol embassy will help the DAO find synergies with other protocols.

As for cutting Morpho users from its airdrop, the “Aave DAO is free to redistribute their net profits as they see fit. Merit is designed to incentivize [user] behaviors benefiting the Aave DAO the most,” Zeller said.

The MakerDAO proposal was triggered by Maker’s proposal, and is subject to an executive vote. This proposal seeks to allocate up to $1 billion of Maker’s balance sheet into USDe and sUSDe; two buzzy but controversial tokens offered by the upstart stablecoin issuer Ethena. The proposal came from the Spark subDAO. Spark operates a lending protocol that started as a fork of Aave, a fact that Aave founder Stani Kulechov has made sure to highlight in the past. 

The allocation would be facilitated through Aave non-alignment target Morpho, as Spark and Morpho recently struck up a partnership.

Read more: Spark protocol deploys new DAI markets on Morpho’s lending protocol

Zeller called Maker out for “reckless management and loss of all guardrails” on X while putting his proposal up on Aave’s governance forum. Kulechov took things a step further, commenting his support for “offboarding DAI from all the Aave markets completely.”

Zeller posted a separate proposal the next day that would deem Spark a non-aligned protocol and prevent Spark users from receiving Aave DAO airdrops. 

“Well obviously I disagree with the decision, but it’s their decision to make,” Sam MacPherson, CEO of Spark contributor Phoenix Labs told Blockworks in regards to the Aave DAO’s proposal to set DAI’s loan-to-value (LTV) ratio to 0%.

Those outside of Aave’s spat with Maker expressed concern over a potential breakup between two DeFi titans.

“Some level of interdependency is healthy, as there are shared incentives that ensure the other side does not mess up. It would be a shame if that were lost,” Gnosis co-founder Martin Köppelmann said.

“Would suck if DeFi ends up as walled gardens,” Blockworks research analyst Matt Fiebach wrote on X.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (10).png

Research

Innovations on Aptos’ technical design through Raptr, Shardines, and Zaptos approach near-optimal latency and throughput by unlocking 100% utilization of network resources, with the capacity to settle 260k transactions per second with latencies less than 800ms. The original Move language was revamped with the launch of Move 2, supporting more expressivity in smart contract logic and a scalable ability to interact with high volume datasets. The ecosystem has benefitted from strong asset inflows, now hosting over $1.3B in stablecoins, $450M in bridged BTC, and $530M in RWAs. Activity in the Aptos ecosystem has grown notably over the past year, with monthly application revenue reaching ~$835k and monthly DEX volumes growing to over $5B, both at new all time highs.

article-image

Interchain Labs will focus on sovereign L1s and institutional demand, abandoning plans for smart contracts on the Cosmos Hub

article-image

Also, only three tokens have outperformed bitcoin so far this year: XMR, HYPE and SKY

article-image

The fund group has submitted proposals in recent months for other funds that would hold litecoin, solana, XRP, HBAR, Sui and others

article-image

Momentum’s back — BTC leads, risk assets follow

article-image

Ondo Finance’s acquisition of blockchain development company Strangelove follows its buy of Oasis Pro

article-image

Cryptocurrency and stock traders alike had a lot to unpack Wednesday