BGD to Leave Aave Citing Governance Tensions

BGD Labs, one of the main teams that builds and maintains Aave’s technology, said it will stop working with the Aave DAO when its contract ends on April 1, 2026.

Aave is currently the largest decentralized finance (DeFi) protocol, with more than $26.8 billion in total value locked, according to DeFiLlama. In a new blog post, BGD said its decision to leave after four years follows disagreements about the protocol’s future direction.

One of the key issues, the team said, is increasing pressure to focus on v4, even though v3 remains the main system in use. The v4 testnet went live in November 2025 and introduced a new “hub-and-spoke” architecture aimed at reshaping DeFi lending.

“While initially our understanding was that Aave v4 would be a complement of a very mature and successful v3, over time, Aave Labs started to create what we think is a very aggressive [sic] criticism of Aave v3, to promote the new features of v4,” the post reads.

BGD’s exit raises questions about how Aave’s development work will be handled going forward. Although the team said it will continue working as usual, and then hand off projects so other teams can take over.

BGD also stressed that its decision wasn’t due to technical problems with the protocol, adding that many of the issues it identified in 2022 have since been resolved. They also described Aave v3 as a “solid and future-proof” system with governance that “just works,” and reassured that its systems should keep running normally.

Separately, Marc Zeller, founder of the Aave Chan Initiative (ACI), said in a message originally written in French on Telegram that BGD’s departure “changes everything.” In a separate message, he disclosed that he sold part of his token holdings.

Currently, Aave’s native token AAVE is trading at around $118, down about 3% over the past 24 hours.