Aave Labs proposed on Oct. 2 the establishment of a Cayman Islands foundation designed to bring the lending protocol's trademark and intellectual property under Aave DAO control. The "Aave Foundation, Phase 1" proposal is currently in the Aave Request for Final Comments (ARFC) stage.
Phase 1 would fund formation of the entity and initial independent appointments. Subsequent transfers of the Aave trademark, primary domains and codebase IP would require separate governance proposals and votes.
Aave Labs stated the Aave trademark and primary domains currently operate outside the DAO's direct control. Ownership of some code, risk tools, models and documentation funded by the DAO resides with external providers who developed them. The World Intellectual Property Organization's database lists Estonian entity Quantum Swan OÜ as the holder of a U.S. $AAVE wordmark registration.
The proposed foundation would serve as a legal owner capable of holding title, executing contracts and defending protocol assets. Intended holdings include the Aave trademark, primary domains, protocol codebase IP transferred to the foundation and IP assigned under service-provider agreements. The current ARFC does not specify the exact domains or code repositories slated for assignment.
New code, tooling, models and documentation would become standard assignments to the foundation as service-provider engagements are renewed or replaced. The foundation would then license the Aave name back to Aave Labs for product development without charge.
The foundation would operate with an independent director managing the memberless entity and an independent supervisor overseeing the director. Neither could be affiliated with Aave Labs or its service providers, and neither would have appointment rights for the other role.
Through Aave Improvement Proposals (AIPs), the DAO would possess authority to appoint and remove directors after initial appointments are made. The DAO would also retain consent rights over constitutional amendments, disposals of core intellectual property, mergers and restructurings of the foundation.
Tokenholders would continue to oversee protocol listings, parameter adjustments, budget allocations and selection of service providers. For $AAVE tokenholders, these powers represent governance authority, not equity, as the foundation would have no members or shareholders.
The DAO could direct the foundation's winding-up and transfer of remaining assets to a successor entity, subject to the directors' fiduciary duties and applicable law. Phase 1 specifically requests funding for reasonable incorporation, legal and appointment costs, without establishing a recurring budget. Any future funding beyond initial setup would necessitate its own governance proposal and vote.
If the ARFC gains community consensus, subsequent steps include a Snapshot vote, followed by an on-chain AIP to authorize setup fees, then incorporation and initial appointments. Each subsequent phase would require a separate proposal and vote, allowing the DAO to reject any future asset transfers or operational plans.
