A governance clash has erupted within the Aave ecosystem after a key interface change by Aave Labs redirected potential revenue streams away from the DAO’s treasury, igniting debate over economic control and transparency.
The decentralized finance (DeFi) protocol Aave is currently embroiled in a governance controversy after its primary development firm, Aave Labs, made a unilateral change to the protocol’s main user interface. The update replaced the ParaSwap integration — which historically generated referral fees for the Aave DAO treasury — with CoW Swap as the backend for trade execution.
According to governance delegates, this alteration has effectively cut off an income stream estimated at about $200,000 per week, amounting to roughly $10 million annually in potential revenue for the DAO.
The dispute highlights deepening tensions between the DAO — the decentralized governing body that controls Aave’s core smart contracts — and Aave Labs, the organization that builds and maintains much of the protocol’s software infrastructure. Critics argue that by implementing the change without seeking DAO approval, Aave Labs has undermined the ethos of shared governance and redirected value away from AAVE token holders.
Aave governance conflict: scope and immediate stakes
Marc Zeller, founder of the Aave Chan Initiative, described the change as a “stealth privatization” of valuable protocol assets and revenue opportunities. Delegates warn that the lack of transparent communication could set a worrying precedent, especially as the community prepares for major upgrades like the upcoming V4 release, which could further centralize control over auxiliary features and revenue sources.
In response, Aave Labs has rejected claims that the revenue was lost or diverted improperly. The firm asserts that the fees previously generated through ParaSwap were never a mandatory protocol fee but rather a discretionary surplus it had been contributing to the DAO voluntarily. Aave Labs also emphasized that the web interface represents a private product maintained and funded by the company, responsible for its engineering and security costs — an effort it maintains is separate from the DAO’s governance.
According to Aave Labs, the shift to CoW Swap was intended to provide better execution pricing and stronger protection against maximum extractable value (MEV) for users, rather than to secure additional revenue. The firm acknowledged shortcomings in how the change was communicated to the broader community, underscoring the need for clearer dialogue between developers and governance delegates moving forward.
