PANews reported on December 15th, citing CoinDesk, that an internal debate within the Aave DAO has raised questions about who controls the protocol interface andPANews reported on December 15th, citing CoinDesk, that an internal debate within the Aave DAO has raised questions about who controls the protocol interface and

Aave DAO opposes the protocol's front-end fees no longer flowing into the treasury.

2025/12/15 21:54

PANews reported on December 15th, citing CoinDesk, that an internal debate within the Aave DAO has raised questions about who controls the protocol interface and who benefits financially from it. Earlier this month, Aave Labs integrated CoWSwap into the app.aave.com interface, replacing the Paraswap route previously used for collateralized swaps. Representatives pointed out that this prevents swap-related fees from flowing into the Aave DAO's treasury. Orbit representative EzR3aL stated that this integration introduced approximately 15 to 25 basis points of front-end fees, which flowed to external recipients rather than the DAO. On-chain data shows that Ethereum associated with the CoWSwap partner fee mechanism is distributed weekly across multiple networks, potentially amounting to tens of millions of dollars annually. The core of the debate is the distinction between "protocol and product." In its forum response, Aave Labs stated that the interface is operated, funded, and maintained independently of the protocol governed by the DAO. Under this model, the DAO controls on-chain parameters, interest rates, and protocol-level fees, while Aave Labs has autonomy over optional application-level features.

However, Marc Zeller of ACI points out that the monetization revenue from the aave.com frontend should have supported the DAO, but the CoWSwap solver relies on external free flash loans, bypassing Aave's infrastructure and further reducing the DAO's revenue. Aave Labs counters that Paraswap surpluses are never a mandatory right stipulated by the protocol, and will naturally disappear once the routing logic changes; other frontends still do not require permissions, and the DAO is free to build or fund its own interfaces; in the future, the economic model under protocol governance and the product decisions of independent funding will be more clearly distinguished.

Related reading: Annual revenue losses of tens of millions spark governance controversy; Aave Labs accused of "backstabbing" the DAO.

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