A dispute over revenue sharing has arisen between the community governing the DeFi lender Aave and its primary development company, Aave Labs.
The conflict revolves around Aave Labs' recent decision to integrate CoW Swap as the underlying infrastructure for trading on the protocol's main website. This replaced ParaSwap, a previous integration that generated referral fees to the Aave DAO treasury.
DAO members are questioning the financial implications after the interface update.
Governance delegates say the change has cut a revenue stream of approximately $ 200,000 per week. Annually, they estimate the impact amounts to around $ 10,000,000, shifting values away from the token holders.
Marc Zeller, founder of the Aave Chan Initiative, criticized the measure and called it a “sneaky privatization” of brand values.
Zeller believed that Aave Labs unilaterally changed the financial agreement without seeking approval from the DAO, which governs the underlying smart contracts.
“Aave Labs has, in pursuit of its own earnings, sent Aave user volume over to competitors. This is unacceptable. With this integration, the Aave protocol has lost two sources of income that cannot be easily replaced,” he wrote.
Zeller warned that the lack of communication raises concerns about how future upgrades will be handled.
He specifically pointed to the upcoming V4 upgrade and questioned whether other “additional features” might also be eliminated from the DAO.
“It is important to put together the whole picture to assess whether Aave Labs has violated its expected duty of trust towards Aave DAO and AAVE token holders, and what we can expect from V4 in general,” Zeller concluded.
Aave Labs defends its actions
In a detailed response, Stani Kulechov, founder and CEO of Aave Labs, defended the integration and rejected the characterization of lost funds as stolen income.
Kulechov claimed that the previous fees from ParaSwap were a “discretionary surplus” and not a mandated protocol fee.
“There has never been a fee exchange; it has been a surplus we donated to the DAO,” he stated.
He also clearly distinguished between the Aave protocol, the DAO-governed decentralized smart contracts, and the interface. He described the interface as a private product funded and maintained by Aave Labs.
Kulechov said that Aave Labs bears the costs of engineering work and security on the website. He added that the DAO does not subsidize ongoing product development expenses.
Therefore, the company claims the right to profit from the interface to ensure sustainability.
“It is also perfectly fine for Aave Labs to make money from its products, especially since they do not touch the protocol itself,” he said.
The development company also reiterated Kulechov's view and admitted that they did not communicate the change well enough.
The company stated that they switched to CoW Swap to ensure better price execution and stronger protection against MEV (maximum extractable value), not to generate more income.
