Aave’s internal rift deepens… token briefly plunges 6% intraday after key developer exits

Governance tensions within the Aave (AAVE) ecosystem of the decentralized finance (DeFi) lending protocol appear to have escalated to the point that a key developer has announced it will not renew its contract.

According to crypto asset (cryptocurrency) news outlet CryptoNews on the 21st (KST), Bored Ghosts Developing (BGD)—the development firm that has handled Aave’s development and maintenance alongside the Aave decentralized autonomous organization (DAO)—said it will not renew after its contract expires in April.

BGD’s refusal to renew is reportedly rooted in a governance proposal outlining plans to transition to “Aave v4.” BGD said, “The current version, v3, is the core revenue base of the Aave ecosystem and a fully functioning system,” adding that “it is not desirable to designate v4 as the project’s official technical foundation,” voicing concern.

In particular, BGD expressed dissatisfaction that users were pushed to move to v4 by policy changes such as adjusting lending terms.

Following the news, Aave fell more than 6% at one point during the session, slipping below $115. It has since recouped part of the drop and is now down 1.27% from the previous day at $122.50.