I think the Aave dust up exposed it as a DAO dominated by its founder. But it’s still a DAO, with debate and multiple power centers.

Contrast with Sky moving >$60m out of the treasury into a pair of entities in August, neither of which answers to tokenholders. Was crickets.

There is a material difference in governance risk from the two power dynamics.

Aave has a king, but still relies on a decentralized network of local power brokers to operate Aave. Kind of like a feudal king, who is constrained by social contract and idiosyncratic conditions.

Sky, however, has successfully centralized into an absolute monarchy (to continue the analogy), with a lot of capacity for the cofounder to act unilaterally.

Lack of constraints means the king is free to operate the project as he feels is appropriate, which is good if they have a demonstrated record of competence and bad if they have a demonstrated record of exploitation or underperformance.

So governance risk collapses into key person risk as a DAO centralizes into a proprietorship.