A dispute continues to flare up between the Aave Decentralized Autonomous Organization (DAO), which governs Aave's decentralized finance (DeFi) protocol, and Aave Labs, the most important development company for Aave products, over fees from its recently announced integration with decentralized exchange aggregator CoW Swap.
The issue was raised by pseudonymous Aave DAO member EzR3aL, who said that the fees generated by crypto-asset swaps with CoW Swap went to a special on-chain address, to not the cashier of the Aave decentralized autonomous organization.
Instead, the fees go to a non-public address controlled by Aave Labs. EzR3aL raised several questions, including why the DAO was not consulted before forwarding the fees and argued that the fees belong to the DAO.
The post within the governance forum that sparked the controversy. Source: Aave Governance
“An entity aside from the Aave DAO receives a minimum of $200,000 value of Ether per week,” EzR3aL said, adding that this equates to a possible $10 million in annual revenue retained by the DAO.
Aave Labs responded that the front-end components for the web site and application interfaces have all the time been the legitimate purview of Aave Labs.
Aave Labs also claimed that it was the corporate that funded the event of the “adapters,” the lines of code that allow swaps and other integrations to work.
The total value locked within the Aave protocol and a financial overview of the DeFi platform. Source: DeFiLlama
However, the response did little to curb tensions, as several DAO members said that the Aave DAO funded the event of the unique adapter technology; Therefore, the income from the combination should flow back to the DAO.
Marc Zeller, the founding father of the Aave Chan Initiative, a delegate platform serving the Aave governance community, said the choice to direct fees exclusively to Aave Labs was “extremely concerning.”
“Aave Labs has diverted Aave user volume to competitors in pursuit of its own monetization. This is unacceptable,” said Zeller.
Cointelegraph reached out to Aave Labs but didn’t receive a direct response on the time of publication.
The conflict highlights the complexities of running a DAO, a novel type of governance and organization that gives benefits over traditional business structures but in addition presents its own unique challenges.
