A dispute has arisen over the revenue sharing between the community governed by the DeFi provider Aave and the main development company, Aave Labs.
The conflict revolves around a recent decision by Aave Labs to integrate CoW Swap as the foundational infrastructure for trading on the protocol's main website. This change has replaced ParaSwap, a previous integration that generated referral fees for the Aave DAO treasury.
DAO members are questioning the economic implications following the interface update.
Governance delegates say that this change has removed a revenue source of about $200,000 per week. They estimate that this has an annual impact of approximately $10 million and that this detracts value from the token holders.
Marc Zeller, founder of the Aave Chan Initiative, criticized this step and called it a “silent privatization” of brand shares.
Zeller claimed that Aave Labs unilaterally changed the economic agreements without asking for the DAO's approval. This DAO governs the underlying smart contracts.
“Aave Labs has redirected the trading volume of Aave users to the competition to increase their own revenue. This is unacceptable. Through this integration, the Aave protocol has lost two revenue sources that are not easy to replace,” he wrote.
Zeller warned that the lack of communication raises concerns about how future upgrades will be handled.
He particularly pointed to the upcoming V4 upgrade and questioned whether other “additional features” could also be kept outside the DAO.
“It is important to look at the whole and determine whether Aave Labs has violated its expected duty of care towards the Aave DAO and the AAVE token holders, and what we can generally expect from V4,” Zeller concluded.
Aave Labs defends actions
In a detailed response, Stani Kulechov, founder and CEO of Aave Labs, defended the integration. He rejected the claim that it was about stolen revenue.
Kulechov stated that the previous fees via ParaSwap were a “voluntary surplus” and not a mandatory protocol fee.
“It has never been a fee switch, it was a surplus that we donated to the DAO,” he said.
He also made a clear distinction between the Aave protocol: the DAO-governed decentralized smart contracts and the front-end interface. According to him, this interface is a private product that is funded and maintained by Aave Labs.
Kulechov said that Aave Labs bears the costs for technology and security of the website. He indicated that the DAO does not contribute to ongoing product development.
Therefore, the company claims it has the right to monetize the interface to ensure sustainability.
“It is also perfectly fine for Aave Labs to make money from its products, especially since they do not affect the protocol itself,” said Kulechov.
The development company also reiterated Kulechov's position and acknowledged that it had communicated too little about this change.
The company stated that the transition to CoW Swap was made to provide better execution prices and stronger protection against MEV (maximum extractable value), and not to generate extra income.
