Aave Labs and the Aave DAO battle over CoW Swap fee flows, with delegates pushing to move all Aave IP, brand and frontend assets under direct tokenholder control.
Summary
- CoW Swap fees on the Aave frontend flowed to an Aave Labs wallet, prompting accusations of “stealth privatization” and an estimated $10m in diverted annual revenue.
- Delegates proposed forcing transfer of Aave trademarks, domains, code and social accounts to the DAO, effectively turning Aave Labs into a DAO-owned subsidiary.
- Aave Labs countered that it owns the website and brand while the DAO owns smart contracts, before launching a holiday-period Snapshot vote that critics called rushed.
A governance dispute has emerged within the Aave protocol ecosystem, pitting the decentralized autonomous organization against Aave Labs over revenue distribution and asset ownership, according to public blockchain records and social media reports.
The conflict became public in December following a partnership announcement between Aave (AAVE) Labs and CoW Swap on December 4 to improve swap pricing and provide MEV protection on the Aave interface, according to statements from Aave Labs.
On December 11, a delegate published on-chain analysis indicating that swap fees from the new CoW Swap contract were being directed to a wallet controlled by Aave Labs rather than the DAO treasury, according to the published analysis. Marc Zeller, a delegate from Aave Chan Initiative, characterized the arrangement as “stealth privatization” and estimated approximately $10 million in annual revenue was not flowing to the DAO, according to statements posted on social media.
On December 16, a governance proposal emerged demanding transfer of all Aave intellectual property, code, and brand assets to DAO control, according to the proposal text. The measure would convert Aave Labs into a DAO-owned subsidiary and require return of past revenue earned using the Aave brand, according to the proposal terms.
A second proposal, introduced by a former chief technology officer of Aave Labs, argued that the DAO should own trademarks, domains, and social accounts if it funds development and marketing activities, according to the proposal documentation.
Aave Labs responded that the CoW Swap arrangement was not a fee switch and that frontend revenue represented a voluntary donation from the company, according to statements from the entity. The company maintained it is a private entity and that while the DAO owns smart contracts, Aave Labs retains ownership of the website and covers hosting, security, and frontend engineering costs, according to the company’s statements.
On December 23, Aave Labs initiated a Snapshot vote proposing to transfer control of brand assets, domains, social accounts, GitHub repositories, and npm packages to AAVE token holders, according to the voting platform. The former CTO stated he did not approve the vote and called the timing “disgraceful,” urging voters to abstain because discussions were ongoing, according to social media posts. Zeller raised concerns about the vote launching during the holiday period and noted that new delegations gained voting power shortly before the snapshot, according to his statements.
In other AAVE-related news, the company’s founder Stani Kulechov purchased has been on a purchasing spree of AAVE tokens, scooping up over $12 million USD worth of them in the past week.
The dispute raises questions about ownership structures in decentralized protocols, including control over code repositories, user interfaces, and brand assets, according to observers of the decentralized finance sector. The outcome may establish precedent for governance disputes in other DeFi protocols, according to industry analysts.
Aave Labs was founded by Stani Kulechov and operates as a centralized entity that develops infrastructure for the Aave protocol, according to company information. The Aave DAO represents token holders who govern the protocol through on-chain voting mechanisms.
AAVE is trading around $155–160 dollars today, versus roughly $308 at the start of 2025, down about 50% year to date.
