- The partnership between Aave Labs and CoW Swap has redirected fees away from the Aave DAO treasury.
- Previously, fees from swaps via ParaSwap’s adapter were donated to the DAO treasury but now a 0.15% to 0.25% fee from CoW Swap trades is not transferred.
- The latest weekly fee transfer amounted to 46 ETH, valued at over $150,000.
- Aave Labs claims the frontend product they fund and maintain is separate from the protocol that the DAO governs and justifies monetizing these features.
- The Aave Chan Initiative and community members have expressed concern over the move, calling for better alignment between Aave Labs and the DAO.
The partnership between Aave Labs and CoW Swap has led to fees that were once directed to the Aave Decentralized Autonomous Organization (DAO) treasury now being retained elsewhere. This change affects swap transactions executed on the Aave Labs frontend, which previously routed trades through ParaSwap. Users experienced a shift after CoW Swap became fully responsible for in-platform swaps in a recent update.
The transferred fees from the DAO’s treasury have fallen since the integration began in June. The weekly fee transfer recently recorded was 46 ETH, worth over $150,000 at current values. Earlier, surplus fees generated above the protocol’s base transactions by ParaSwap were donated to the DAO treasury, supporting its revenue.
In a public post on the Aave governance forum, a delegate named EzR3aL noted the DAO is no longer receiving the “extra fees… ranging from 15 to 25 bps (basis points),” resulting from CoW Swap’s new integration. Aave Labs insists that these frontend integrations exist outside the core protocol governed by the DAO, emphasizing that the surplus funds were previously donated because the Labs team lacked the means to retain them. They stressed the frontend is a product they design, fund, and maintain independently.
Community members, including Marc Zeller of the Aave Chan Initiative (ACI), have voiced concerns about the arrangement. Zeller described the fee diversion as “extremely concerning,” suggesting it amounts to a form of “stealth privatization” that uses the DAO’s brand and intellectual property without proper benefit to token holders. The governance forum saw over 30 comments debating the issue, with calls for better unity between Aave Labs and the DAO, labeling the current situation as “mis-alignment.”
The Aave Chan Initiative recently proposed measures to increase the DAO’s revenue, including suspending the use of Sky’s USDS as collateral and shutting down underperforming chains. Both proposals passed, signaling the DAO’s focus on improving financial sustainability.
Aave remains the largest decentralized finance lending platform by total value locked (TVL), holding about $34 billion according to DeFi data dashboard DeFiLlama. The platform’s estimated annual revenue from user fees is around $112 million.
For related details, see the original post on the Aave governance forum. Further context on Aave’s protocol and revenue proposals is available via the Snapshot voting platform.
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