The revenue ownership crisis at AAVE escalated when the integration of CowSwap meant that transaction fees no longer flowed to the DAO treasury, sparking a conflict between the DAO and contractor AAVE Labs over fee ownership rights.
Previously, DAOs paid contractors (including AAVE Labs), so the user interface, branding, features, and associated fees were considered part of the DAO. The new CowSwap configuration changes the fee stream, triggering a strong reaction from delegates, with estimates suggesting the DAO could lose at least $10 million per year.
- Swap fees following CowSwap integration no longer go to the AAVE DAO treasury, sparking ownership disputes.
- Delegates considered this to be the "privatization" of protocol revenue, which conflicts with the interests of tokenholders.
- AAVE Labs has been contributing for over 8 years, and AAVE V4 and GHO are still generating revenue for the DAO.
The DAO's ownership of AAVE fees is being challenged.
Fees from DAO-sponsored features are considered to belong to the DAO, but the new CowSwap configuration means swap fees no longer flow to the DAO treasury, sparking controversy over revenue sharing rights.
According to several administrators, contractors (including Labs) are paid directly by the AAVE DAO; therefore, the UI, branding, features, and associated fees “belong” to the DAO. However, the new CowSwap configuration has redirected the fee flow, no longer going to the DAO treasury.
One delegate estimated a minimum loss of $10 million per year for the DAO as a result of this change. Many also argued that ParaSwap previously Chia revenue with the DAO, while the current configuration prioritizes private service providers.
The counterarguments point out that ParaSwap (which was replaced by CowSwap) used to Chia revenue with DAOs, while the new configuration removes DAOs from the value chain , as argued in the X post .
To monitor the Price Impact, liquidation , and Derivative (OI, funding, liquidation) around AAVE after fee changes, traders can utilize tools on BingX to observe leverage fluctuations and market cash flow in real time, supporting trading decisions in the context of revenue disputes.
AAVE delegate warns against “privatization” of revenue.
Delegates called the move "worrying," after AAVE Labs' Horizon (tokenization) proposal had previously been rejected by the DAO, raising doubts about the benefit model.
Earlier this year, AAVE Labs proposed its Horizon tokenization product with a Token, but it was rejected by the DAO. Marc Zeller (AAVE-Chan Initiative) argued that "privatizing" protocol revenue poses a clear threat to tokenholders.
"The privatization of protocol revenue is concerning and a clear attack on tokenholder rights."
– Marc Zeller, Founder, AAVE-Chan Initiative – X, 2025
A fund partner, Louis, also expressed a similar view, highlighting the risk of long-term conflict between DAOs/ Token and independent staking structures.
“The biggest threat to any Token and DAO is a competing independent stake entity. Tokenholder AAVE needs to respond more aggressively to this long-term risk.”
– Louis, VC partner – X, 2025
AAVE Labs affirms its commitment to continuing to create value for DAOs.
AAVE Labs says it has contributed for over 8 years, building AAVE V4 and GHO; these components generate revenue for the DAO, while the DAO is implementing AAVE acquisition program.
“AAVE Labs has contributed to the protocol for over 8 years…responsible for innovation with AAVE V4, GHO, and other primitives; all of which generate revenue for the AAVE DAO.”
– Stani Kulechov, Founder, AAVE – X, 2025
on-chain data from Blockworks Research shows AAVE achieved over $15 billion in net inflows in Q3/2025. This demonstrates that Capital appeal remains strong despite governance controversies.
The price of AAVE hasn't reacted strongly to the debate; the Token has traded sideways around $200 over the past week, suggesting the market is waiting for further clear signals regarding governance and fee flows.
Conclusion: Revenue disputes are a test of AAVE 's management.
The ownership of fees between DAOs and contractors is a bottleneck. The solution needs to balance the innovation incentives of labs with the interests of tokenholders, restoring a transparent fee flow to the DAO treasury or implementing a community-approved Chia mechanism.
Frequently Asked Questions
How has CowSwap integration changed AAVE 's fee structure?
Swap fees under the new CowSwap configuration no longer flow to the AAVE DAO treasury as before, leading to concerns about revenue loss and disputes over revenue ownership between the DAO and contractors.
Why are delegates opposing the recent move?
They view this as "privatizing" protocol revenue, undermining the interests of tokenholders. Previously, AAVE Labs' Horizon proposal was rejected by the DAO, further raising doubts about the value distribution model.
How did AAVE Labs respond to the criticism?
AAVE Labs claims to have contributed for over 8 years, developing AAVE V4 and GHO, products that generate revenue for the DAO. Simultaneously, the DAO is still running an AAVE buyback program to increase value for tokenholders.
