- A dispute is ongoing within the Aave DeFi community about control and revenue between Aave Labs and the Aave DAO.
- Revenue from in-platform token swaps is now directed to Aave Labs instead of the DAO treasury, causing concern among DAO members.
- Aave is DeFi’s largest lending platform, managing over $30 billion in assets and generating more than $100 million in annual revenue.
- The governance split between Aave Labs, handling product development, and the DAO, managing protocol decisions, is causing conflicts over ownership and accountability.
- Experts suggest legal structuring or clearer rules for DAO-adjacent entities to resolve ongoing ownership and revenue sharing disputes.
A dispute has emerged between Aave Labs and the Aave DAO over who controls and profits from the popular DeFi platform. The conflict intensified when users realized that revenue from in-platform token swaps, previously going to the DAO treasury, now flows to Aave Labs.
Aave Labs Founder, Stani Kulechov, cited ownership of the product interfaces like aave.com as justification for monetizing these swap revenues. Meanwhile, representatives from Aave DAO emphasize that the protocol’s trust and risk management stem from the DAO’s governance, not just the user interface or branding.
As DeFi’s leading lending platform, Aave holds over $30 billion in total value locked and generates an estimated $100 million in revenue each year. Most revenue derives from borrower interest. Swap revenues account for roughly 1% of total income, indicating the swap fee redirection is not financially critical but symbolically significant within the community.
The project operates under a hybrid model: the DAO governs the lending protocol and treasury decisions, while Aave Labs focuses on product development and maintenance. The DAO has paid millions to Labs for upgrades, including $16 million for version 3 development and $12 million for version 4, which involved front-end work and a refreshed visual identity.
Longtime contributor Ernesto Boado noted that responsibility for maintaining the user interface since 2022 was unclear and criticized Labs for assuming this role without budget approval or formal governance discussion. Such ambiguity has contributed to current tensions.
With regulatory pressures, many DeFi projects, including Aave, separate legal entities from their token-governed DAOs to limit exposure. This separation has introduced new ownership and accountability issues, as highlighted by Aave Chan Initiative’s Marc Zeller, who called for clarity on what owning Aave truly means.
Legal expert Gabriel Shapiro suggested two possible solutions: converting the DAO into a formal legal entity or establishing defined accountability and rules governing related entities like Labs. How Aave DAO and Aave Labs resolve their differences could influence future decentralized project structures.
Recent similar conflicts, such as at Uniswap, illustrate the challenges and controversies when defining revenue rights and governance roles. The outcome for Aave remains uncertain but is closely watched across the decentralized finance sector.
For more information, visit the original Aave governance post, Stani Kulechov’s statement, and data on Aave’s financials.
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