A dispute over revenue sharing has erupted between the Aave community and its core development organization, Aave Labs.
At the heart of the dispute is Aave Labs' recent decision to adopt CoW Swap as the trading infrastructure for the protocol's main website. This swap replaced the previously used ParaSwap, which had allowed referral rewards to accumulate in the Aave DAO's treasury.
DAO members question the financial implications of the user interface update
Governance representatives state that this change cut off a revenue stream of about $200,000 per week. The annual impact is estimated to be around $10 million, which shifts value away from token holders.
Marc Zeller, the founder of the Aave Chan Initiative, criticized the decision and called it ‘a creeping privatization of brand assets.’
According to Zeller, Aave Labs unilaterally changed the financial arrangement without the DAO's approval, even though it manages the underlying smart contracts.
‘Aave Labs directed user volume to a competitor with the aim of increasing its own funding. This is unacceptable. Due to this integration, the Aave protocol lost two revenue streams that are not easy to replace,’ he wrote.
Zeller warned that the lack of communication raises concerns about how future updates will be handled.
He specifically referred to the upcoming V4 update and wondered whether other 'additional features' might also be outside the DAO.
‘It is important to look at the whole picture and determine whether Aave Labs violated its expected fiduciary duty to Aave DAO and AAVE token holders, as well as what we can expect from the V4 update in general,’ Zeller concluded.
Aave Labs defends its actions
In his detailed response, Stani Kulechov, founder and CEO of Aave Labs, defended the decision and rejected the classification of the loss as stolen revenue.
According to Kulechov, the money obtained from ParaSwap was a 'voluntary surplus,' not a fee required by the protocol.
‘This was never a formal payment switch, but a surplus that we donated to the DAO,’ he noted.
He also emphasized the difference between the Aave protocol, the decentralized smart contracts governed by the DAO, and the user interface. He described the user interface as a privately funded and maintained product by Aave Labs.
Kulechov stated that Aave Labs is responsible for the site's technical development and security. He added that the DAO does not fund the ongoing development costs of the product.
The company thus believes it has the right to exploit the user interface financially to ensure its sustainability.
‘It is completely acceptable for Aave Labs to earn from its products, especially since they do not touch the protocol itself,’ he said.
The development team also confirmed Kulechov's view and admitted that the change was not communicated clearly enough.
The company stated it has switched to CoW Swap to provide better execution prices and better protection against MEV (maximum extractable value), not to collect additional revenue.
