Cross-chain DEX aggregator Velora has become the latest protocol to see its decentralized autonomous organization (DAO) vs. Labs structure come under pressure.

Today, April 10, Velora, formerly known as ParaSwap, passed PIP-77: Governance Evolution & Operational Alignment, a proposal to wind down its DAO and consolidate operations under Laita Labs, the development company that built the protocol. The proposal passed with 65.8% of voters for and 16.78% against the shift. 17.41% of voters abstained.

The proposal transfers the roughly $415,000 remaining in the DAO treasury to Laita Labs to settle outstanding infrastructure costs. It also discontinues the DAO's 20% protocol fee routing, retires the staking program with the exit lockup set to zero so stakers can withdraw immediately, and closes the futarchy governance pilot with approximately $19,000 remaining from its original $50,000 allocation.

Per the proposal, going forward, VLR becomes a governance-only token, with Snapshot reserved for structural decisions such as token migrations, new chain deployments, or activation of the contract's 2% annual minting mechanism. Meanwhile, protocol operations, infrastructure, and revenue flow exclusively through Laita Labs.

Laita Labs framed the proposal as an alignment with existing reality: staking rewards and fee routing had already been inactive for months, governance participation had declined, and the DAO had primarily functioned as an off-chain signaling layer while the development team kept the protocol running.

The proposal didn’t pass without community pushback. According to an X post this week from Snapshot, delegate VeloCryptor, an early staker, proposed three compromises, namely a smaller 5-10% revenue share, a treasury buyback reserve, or a conditional sunset tied to revenue staying low for another 6-12 months.

Laita rejected all three, saying even a partial share "brings back the same complexity we're trying to move away from." Another community member, 12342, argued the proposal "shifts the token from something that had a clear economic alignment with the protocol's success into a pure governance token with no direct value capture." Supporter citizen42 backed the team, calling it "not a sunset, it will be a sunrise."

Per DefiLlama data, Velora ranks eighth among DEX aggregators by 30-day volume at $2.06 billion, compared to category leader Jupiter's $11.2 billion.

The vote arrives as the DAO-versus-Labs governance model shows cracks across DeFi. At Aave, a months-long dispute over fee distribution between tokenholders and Aave Labs spiraled into a full-blown contributor exodus — Chaos Labs became the third core contributor to exit Aave in two months, following BGD Labs and the Aave-Chan Initiative, all citing governance misalignment.

At Balancer, a restructuring proposal published in March formalized the wind-down of Balancer Labs Oü and consolidated all activity under a BVI entity operating as a direct agent of the DAO, slashing the team and cutting the annual operating budget by 34%. Meanwhile, DAO governance platform Tally shut down after six years, with its CEO citing reduced demand for DAO tooling as regulatory pressure eased.

This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.

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