A conflict is escalating between the Aave decentralized autonomous organization (DAO), which oversees the Aave decentralized finance (DeFi) protocol, and Aave Labs, the primary development firm for Aave products, regarding fees from the newly announced collaboration with decentralized exchange aggregator CoW Swap.
The matter was raised by the pseudonymous Aave DAO member EzR3aL, who pointed out that the fees accumulated from crypto asset swaps utilizing CoW Swap were being directed to a different onchain address, rather than the treasury of the Aave DAO.
Instead, the fees are funneled to a private address controlled by Aave Labs. EzR3aL posed several inquiries, including why the DAO was not consulted before the fees were redirected, and contended that the fees rightfully belong to the DAO.
“An alternative entity, instead of the Aave DAO, is receiving at least $200,000 weekly in Ether,” EzR3aL stated, adding that this translates to $10 million in potential annual revenue withheld from the DAO.
Aave Labs responded that the front-end components for the website and application interfaces have consistently been under the jurisdiction of Aave Labs.
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Aave Labs asserted that protocol-level modifications, such as interest rate policies and the authorization of changes to smart contract code, have always been within the DAO’s authority.
Aave Labs also claimed responsibility for funding the development of the “adapters,” the lines of code enabling swaps and other integrations.
However, the response did little to alleviate the friction, with several DAO members asserting that the Aave DAO financed the creation of the initial adapter technology; thus, the revenue from the integration should be returned to the DAO.
Marc Zeller, the founder of the Aave-Chan Initiative, a delegate platform representing the Aave governance community, stated that the choice to direct the fees solely to Aave Labs is “extremely concerning.”
“In their quest for monetization, Aave Labs redirected Aave user activity towards competitors. This is unacceptable,” Zeller remarked.
Cointelegraph reached out to Aave Labs but did not receive an immediate response by the time of publication.
The discord underscores the intricacies of managing a DAO, which offers advantages over traditional corporate structures but also presents its own set of distinctive challenges.
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