Polygon, the Ethereum layer-2 network with the most users, accused Aave’s DeFi platform of monopolistic behavior.
Aave is opposed to a proposal that would allocate bridge funds locked to strategies to generate yields. Tension escalated after the lending protocol threatened to withdraw its deployment from Polygon’s network.
Polygon has rejected the controversial proposal.
‘Monopolistic tactics’
Polygon claimed in a 17-Dec-17 statement that Aave had used threats to gain support for a similar plan.
According to Polygon, Aave’s opposition stems from the involvement of Morpho, a competing protocol whose proposal gained traction due to promises of significant ecosystem grants. It also added:
“Whether you support or oppose the Pre-PIP, no one should fear retaliation for proposing ideas or engaging in formal governance processes. Progress comes from constructive debate, not shutting doors on those who bring fresh perspectives.”
Polygon’s founder, Sandeep Nailwal, also criticized Aave’s approach as anti-competitive and damaging to the spirit of Web3. He pointed out that Aave’s earlier proposal failed to gain traction, unlike Morpho’s, which offered significant benefits to the Polygon ecosystem.
Polygon is a polygon according to him Not be intimidated either by monopolistic or aggressive tactics, and continue to investigate innovative methods to gain more success. “He added”
“Our commitment is to a thriving, competitive, and truly decentralised DeFi ecosystem that serves the best interests of all users and builders. The Polygon community will continue to push the boundaries of what’s possible, standing resolute against any actions that undermine the principles of Web3.”
Marc Boiron (CEO of Polygon Labs) also accused Aave, citing centralized governance and fear, of suppressing competitors. He described direct messages from Aave team members as intimidation attempts to dissuade Polygon governance from supporting Morpho’s proposal.
Boiron called for more accountability and urged the DeFi community not to monopolize.
“He added”
“Aave will seek support as they did yesterday to respond to this tweet and others to retain the control they have over lending in this industry. However, new players are emerging who will create a better web3 future.”
Aave’s response
Aave’s founder, Stani Kulechov, defended the protocol’s stance, emphasizing that the DAO acted to protect users from third-party risks.
He argued that the lending protocol’s governance process reflects its commitment to user security, rejecting claims of anti-competitive behavior as a distraction from genuine concerns.
The statement was made by:
“The main feedback for Polygon was that Polygon users were unhappy about a network using their funds for high-risk investments without consent. The fact that Aave opened the discussion and took action to protect users is exactly what DAOs should do.”
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