A conflict has arisen between the Aave decentralized autonomous organization (DAO), which oversees the Aave decentralized finance (DeFi) protocol, and Aave Labs, the primary development entity for Aave products, regarding fees associated with the recent integration with decentralized exchange aggregator CoW Swap.
The matter was brought up by a pseudonymous Aave DAO member, EzR3aL, who pointed out that the fees generated from crypto asset swaps using CoW Swap were being sent to a different on-chain address rather than the treasury of the Aave DAO.
Instead, the funds are being directed to a private address managed by Aave Labs. EzR3aL posed several inquiries, questioning why the DAO wasn’t consulted regarding the routing of the fees, and asserted that these fees rightfully belong to the DAO.
“Another entity, rather than the Aave DAO, is receiving at least $200,000 per week in Ether,” EzR3aL mentioned, noting that this could equate to $10 million in potential annual revenue lost to the DAO.
Aave Labs contended that the front-end components for the website and application interfaces have always been under its rightful jurisdiction.
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According to Aave Labs, changes at the protocol level, including interest rate policies and modifications to smart contract code, have consistently been managed by the DAO.
Aave Labs further asserted it was the entity responsible for financing the development of the “adapters,” which are the lines of code facilitating swaps and other integrations.
Despite this, the response did little to alleviate the tensions, with several DAO members expressing that the Aave DAO financed the creation of the original adapter technology; therefore, the revenue from the integration should return to the DAO.
Marc Zeller, founder of the Aave-Chan Initiative, a delegate platform catering to the Aave governance community, commented that the decision to direct the fees solely to Aave Labs is “extremely concerning.”
“Aave Labs has redirected Aave user volume towards competitors in its pursuit of monetization. This is unacceptable,” Zeller stated.
Cointelegraph contacted Aave Labs but did not receive an immediate response by the time of publication.
This dispute underscores the challenges of managing a DAO, which, while offering advantages over traditional business models, also presents unique complications.
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