A governance dispute has broken out in the Aave forum over CoW Swap fees allegedly routing to an Aave Labs address instead of the DAO treasury. On-chain analysis places the annual value at roughly $10 million (about $200,000 per week), giving the matter immediate financial weight for tokenholders.
The conflict began after delegate EzR3aL published on-chain findings showing swap fees tied to the CoW Swap integration being diverted away from the DAO’s treasury to an Aave Labs address. CoW Swap is a zero-knowledge order-book protocol, and critics in the forum described the redirection as a material revenue shift that resembled “stealth privatization,” a phrase echoed by multiple tokenholders.
The reported annualized amount gives the dispute immediate financial significance for tokenholders who view protocol revenue as a core economic right of the DAO, raising alarms about control over value capture and treasury flows.
Aave Labs and the DAO’s delegations have framed the issue in sharply different terms. The company’s founder, Stani Kulechov, defended the decision by distinguishing between the Aave protocol — governed by the DAO — and an independently operated Aave frontend product that Aave Labs funds and maintains, arguing that monetizing non-core frontend features such as the CoW Swap integration sustains product development and improves user experience, including MEV protection and lower gas costs.
Positions from Aave Labs and DAO delegations
MEV is the extractable value from transaction ordering and inclusion and here refers to protections intended to reduce adverse on-chain execution effects. Marc Zeller of the Aave Chan Initiative called the situation “extremely concerning,” asserting that Aave Labs’ actions breached a tacit understanding that frontend monetization would benefit the DAO. Aave Labs has publicly acknowledged shortcomings in communication but has not conceded on the substance of the fee allocation.
The episode exposes a structural governance question: how to allocate revenue produced at the intersection of protocol operations and product development managed by a separate entity. Observers describe the clash as a stress test for decentralized governance models as protocols scale and blend open-source infrastructure with commercially operated user experiences.
There is, as of mid-December 2025, no formal governance proposal seeking to change the fee arrangement; that pending proposal (or lack thereof) is the next concrete milestone for the community, as tokenholders and delegations consider whether to formalize revenue-sharing rules, seek remedial proposals, or accept a precedent that could shift future value capture.
The dispute sharpens institutional questions about accountability, revenue rights, and communication between a protocol’s DAO and its development team.
