Aave DAO pushed back amid reports that interface fees are shifting away from its treasury, raising immediate questions over protocol revenue and governance oversight.
Aave, one of the largest lending protocols in decentralized finance (DeFi), is facing a heated governance conflict following changes to its user interface that altered how revenue from swap fees is distributed. The core of the dispute centers on the integration of CoW Swap as the protocol’s swap engine, replacing the previous ParaSwap system. This shift resulted in swap fees no longer being routed to the Aave DAO treasury, but instead accruing to a separate address controlled by Aave Labs, the entity responsible for much of Aave’s technical development.
A pseudonymous Aave DAO delegate known as EzR3aL highlighted the issue in an open governance forum post, presenting on-chain analysis suggesting that weekly swap fees — approximately $200,000 — are now bypassing the DAO. On an annualized basis, this amounts to roughly $10 million in revenue that many community members believe should belong to the token holders and be managed by the decentralized treasury.
Under the prior ParaSwap integration, revenue flowed directly to the DAO without charging direct fees to users, making it a consistent source of income for communal decision-making.
Internal tensions grow over revenue rights and decentralization
Critics within the community, including Marc Zeller of the Aave Chan Initiative, have described the situation as a form of “stealth privatization,” arguing that revenue generated by the protocol’s ecosystem should not be diverted away from the DAO without consensus. Some delegates have also raised broader concerns that other emerging features of Aave — such as Vaults, Horizon, and the upcoming v4 liquidation engine — could similarly divert economic value away from the collective governance structure, potentially undermining tokenholder interests.
In contrast, Aave Labs maintains that fees from interface components are legitimately tied to products it finances and develops, and therefore it has the right to monetize those features. The firm has also stated that the integration with CoW Swap was intended to provide better execution prices and stronger protection against maximum extractable value (MEV) for users, though it acknowledges that communication with the broader governance community about the revenue impact was insufficient.
This episode underscores a broader challenge in DeFi governance: balancing the technical autonomy of development teams with the decentralized community’s expectations for control over economic outcomes, especially as protocols mature and generate significant revenue streams.
