Historical analysis based on an article by 陈默 (cmDeFi), published on PANews on December 16, 2025, at 13:00:36 (UTC+8). The dispute was still under discussion, with no governance vote held, at the time of publication.
A dispute over swap fees at Aave exposed a question that reaches beyond one integration: does token-holder control of a protocol also entitle its DAO to revenue generated by products built around it?
In the account published by cmDeFi, Aave Labs replaced ParaSwap with CoW Swap in Aave’s frontend, after which fees flowed to a private address controlled by Labs. Anonymous DAO member EzR3aL raised the issue on the governance forum, accusing Labs of “privatizing” protocol value.
Labs’ position, as described in the article, was that these were frontend and product revenues belonging to Labs—not revenues of the underlying protocol. The disagreement therefore concerned both the destination of fees and the boundary of the DAO’s authority.
One name, two centers of power
The article distinguishes between two organizations that normally work together:
- Aave DAO: The governance organization of AAVE token holders, who vote on proposals. It controls core protocol resources, including smart contracts and the treasury.
- Aave Labs: The development team responsible for building, updating and maintaining the protocol and products such as its frontend and mobile app. The article describes Labs as controlling the frontend, brand, marketing and partnerships.
Labs can develop proposals, including upgrades such as V3 and V4, while implementation of protocol changes requires DAO approval. When their interests align, that division can function as a collaborative arrangement.
The distinction becomes harder when revenue is involved. A protocol can theoretically support multiple independently operated interfaces. But users may encounter the protocol primarily through the interface, brand and partnerships maintained by its original development team.
That leaves two different forms of influence: the DAO’s formal authority over the protocol and Labs’ practical role in developing and presenting the product.
Why the swap integration became contentious
According to the article, revenue from the previous ParaSwap integration had flowed to the DAO. The CoW Swap integration changed that arrangement.
Supporters of Labs argued that integrating a swap service was a frontend decision, separate from Aave’s underlying architecture. If Labs could independently choose whether to offer that integration, they argued, its associated revenue could belong to Labs.
DAO supporters saw the change as diverting value that should benefit AAVE holders or remain in the treasury under governance control. From that perspective, allowing Labs to establish a separate revenue stream risked weakening community authority, particularly when Labs could seek funding for its expenses through the DAO.
These were competing claims about entitlement—not a settled determination of ownership. The article reported no governance vote resolving the issue.
Formal control does not guarantee operational continuity
The dispute also highlighted a limitation of token-based governance: the ability to approve proposals or replace a team is not the same as the ability to maintain development momentum.
CmDeFi argued that a DAO can include independent developers, venture investors and large token holders with differing priorities. Exercising their respective powers can lead to repeated drafting, revision and negotiation. Hiring a replacement team may be possible, but transferring knowledge and sustaining product development can be difficult.
The author cited Sushi as an example of how organizational conflict and personnel changes can damage a project’s market position even when smart contracts allow its existing functions to remain operational. This was an argument about coordination risk, not a claim that Aave would necessarily follow the same path.
Labs’ defenders also emphasized its historical contribution. The article quoted Stani as saying that Aave might never have existed had Emilio not persuaded him to adopt the Aave protocol’s design direction in 2018–2019, when the team was still working on ETHLend.
That history helps explain the tension: token holders possess governance rights, while the founding development team brings accumulated expertise and continuity that cannot necessarily be replaced through a vote alone.
Spending, adoption and accountability
The debate extended beyond swap fees to whether Labs’ development work was delivering sufficient value to the protocol.
The article described Emilio as objecting to what he viewed as malicious attempts to diminish Labs’ contributions. It also reported allegations from ACI team members that Labs had repeatedly tried to take advantage of the DAO and had been challenged over those attempts. Those statements were accusations within the dispute, not independently established findings.
In discussing Zeller’s criticisms, the article cited Portals, Credit Delegation Vault and Lens as initiatives that had not directly translated into protocol revenue or significant adoption. It also reported concerns about V4: the DAO had spent $15 million by that point, while critics questioned its value proposition relative to V3’s liquidity moat and whether it could become another means of extracting revenue.
CmDeFi’s interpretation was that unsuccessful experiments are an unavoidable part of research and development. The DAO was, in effect, funding Labs’ capacity to innovate. In the author’s reading, the demand was not simply to deny Labs credit, but to establish stronger accountability, transparency and alignment between spending and protocol value.
The distinction matters: funding development, launching features and achieving measurable adoption are different outcomes. The dispute concerned how those outcomes should be assessed—and who should benefit when they generate revenue.
The proposed path: clearer revenue boundaries
The article summarized several community suggestions:
- Announce in advance when revenue from a Labs-built product will go to Labs rather than the DAO.
- Define an explicit revenue-sharing arrangement between Labs and the DAO.
- Create a transparent page on the Aave or Labs website explaining these arrangements, helping prospective AAVE holders, including institutions and funds, evaluate them.
CmDeFi favored a negotiated balance of interests, while warning that even a settlement would not erase the underlying gap between the founding team’s expectations and those of token holders. The author remained positive about Aave’s long-term prospects, describing it as one of the relatively few DeFi projects with a market-tested competitive moat. That was the author’s assessment, not a demonstrated resolution of the governance problem.
As of the original publication, the central question remained open: where does DAO-governed protocol value end, and independently monetized product value begin? Aave’s dispute illustrated why that boundary needs to be explicit rather than assumed.
