A conflict over revenue sharing has arisen between the organization governing the DeFi lender Aave and the development company Aave Labs.
The conflict concerns Aave Labs recently choosing to use CoW Swap as the new infrastructure for trading on the protocol's main site. This new choice replaced ParaSwap, a previous solution that provided referral fees to the Aave DAO's treasury.
DAO members question the financial implications of the interface update
Representatives from governance say that the change has removed a revenue source of about 200,000 USD per week. When calculated over a year, it amounts to approximately 10 million USD, which shifts value away from token holders.
Marc Zeller, founder of Aave Chan Initiative, criticized the decision and called it a “hidden privatization” of brand assets.
Zeller believes that Aave Labs changed the terms unilaterally without asking the DAO, which governs the smart contracts.
Aave Labs, which wants to make money themselves, sent Aave users' volume to competitors. This is unacceptable. Through this integration, the Aave protocol lost two revenue sources that are hard to replace,” he wrote.
Zeller warned that the lack of communication raises concerns about future updates.
He specifically mentioned the upcoming V4 update and wondered if other “extra features” could also be removed from the DAO's control.
“It is important to see the whole picture to determine if Aave Labs has broken its trust with Aave DAO and AAVE token holders, and what we can expect from V4,” concluded Zeller.
Aave Labs defends its decisions
In a detailed response, Stani Kulechov, founder and CEO of Aave Labs, defended the switch, saying that the lost money is not stolen revenue.
Kulechov stated that the previous fees from ParaSwap were a “voluntary surplus” and not a fee that the protocol had to charge.
“It has never been a mandatory fee; it was a surplus we donated to the DAO,” he explained.
He also made a clear distinction between the Aave protocol, DAO-governed smart contracts, and the front-end interface. He described the interface as a private product that Aave Labs finances and maintains.
Kulechov said that Aave Labs bears the costs of developing and protecting the website. He emphasized that the DAO does not pay the ongoing development costs.
Therefore, the company says it has the right to monetize the interface to keep it alive.
“It is also perfectly fine for Aave Labs to charge for its products, as long as it does not affect the protocol itself,” he said.
The development company agreed with Kulechov's opinion but acknowledged that they should have communicated better about the change.
The company switched to CoW Swap to provide better prices and stronger protection against MEV (maximum extractable value), not to gain more revenue.
