Historical analysis based on an article by 陈默 cmDeFi, published by PANews on December 16, 2025, at 13:00:36 UTC+8. The dispute was still under discussion, with no governance vote reported at that time.
A disagreement over swap fees exposed a bigger question at Aave: where does the DAO’s authority over the protocol end, and Aave Labs’ control over its products begin?
According to the source article, Aave Labs replaced ParaSwap with CoW Swap in its front end, after which fees flowed to an address controlled by Labs. Pseudonymous DAO member EzR3aL raised the issue on the governance forum, accusing Labs of privatizing value associated with the protocol.
Labs’ position was that these were front-end and product revenues belonging to Labs, rather than income from the core protocol. The article also reported that revenue from the previous ParaSwap integration had flowed to the DAO—making the change particularly contentious.
One Aave, two centers of authority
The article separates Aave into two overlapping layers:
- Aave DAO: AAVE token holders exercise governance through voting. The DAO controls core protocol resources, including smart contracts and the treasury, and votes on proposed protocol changes.
- Aave Labs: The development team builds, updates and maintains the protocol and user-facing products. It also manages resources such as the front end, branding, marketing and partnerships.
These roles normally reinforce each other. Labs develops proposals, including major upgrades such as V3 and V4, while the DAO decides whether to approve protocol changes.
But they are distinct entities. A protocol can theoretically support multiple independent front ends. That separation underpins Labs supporters’ argument: if a swap integration is a product-level decision that Labs can introduce or remove, its revenue should belong to Labs.
DAO supporters countered that value associated with Aave should benefit AAVE holders or remain in the treasury under governance control. The previous ParaSwap revenue arrangement strengthened that objection.
Voting power does not replace a development team
The author frames the conflict as a tension between formal authority and operational continuity.
Token holders can vote, allocate treasury resources and, in principle, replace a development team if the voting balance permits. Yet a decentralized community may struggle to coordinate developers, investors and large holders quickly enough to maintain a competitive product.
The article cites Sushi as a cautionary example of organizational disputes affecting a project’s market position. Its broader argument is that smart contracts can keep functioning through a team change, while development continuity and competitiveness remain harder to preserve.
Labs’ contribution is also part of the debate. The article quotes Stani crediting Emilio with persuading him in 2018–2019 to pursue the design direction that became Aave, when the team was still working on ETHLend. That history helps explain why Labs supporters reject an account of Aave based solely on token-holder control.
Criticism extends beyond swap fees
The source describes a wider argument over contribution, spending and accountability. Emilio argued that some participants were maliciously diminishing Labs’ contribution and value. An ACI team member, meanwhile, accused Labs of repeatedly trying to take advantage of the DAO. These were competing claims, not established findings.
The article also recounts Zeller’s criticism of initiatives including Portals, Credit Delegation Vault and Lens, questioning how much direct protocol revenue or adoption they had delivered.
On V4, it reports concerns that the DAO had spent $15 million while the upgrade’s value proposition remained unclear relative to V3’s liquidity moat. The suggestion that V4 might become another vehicle for extracting revenue was an allegation, not a demonstrated outcome.
The author’s interpretation was that failed experiments are an unavoidable part of research and development, but DAO funding still requires stronger accountability, transparency and alignment.
What remained unresolved
Community suggestions included advance disclosure when product revenue would go to Labs, an explicit DAO–Labs revenue-sharing arrangement, and a public transparency page explaining the relationship to prospective AAVE holders, particularly institutions and funds.
The author favored a negotiated settlement and remained optimistic about Aave, describing it as one of the relatively few DeFi projects with a market-tested moat. That was the author’s assessment, not evidence that the dispute would end well.
At publication, no settlement or governance vote was reported. The unresolved issue was not simply who built Aave, but whether the founding team and token holders shared the same expectations about who should receive value generated around it.