Debate over Aave DAO revenue after CoW Swap integration

A lively debate is underway at Aave, the largest DeFi lending platform, after an Orbit delegate raised concerns that swap fees from the new interface using CoW Swap no longer flow to the Aave DAO treasury but are instead directed to a private address, potentially “privatizing” about 10% of the DAO’s potential revenue.

Marc Zeller from the Aave Chan Initiative (ACI) called this “a highly concerning issue,” emphasizing that Aave Labs and related service providers have an obligation to protect the interests of AAVE token holders. He warned that replacing Paraswap with CoW Swap could cause the DAO to lose both revenue streams: Paraswap referral fees and flash loan fees from swap transactions. Zeller also questioned other products such as Aave Vaults, Horizon, and the liquidation engine of Aave v4, fearing that some revenue might be flowing to Aave Labs instead of the DAO.

Meanwhile, Aave founder Stani Kulechov defended Aave Labs’ right to earn revenue from the proprietary interface they developed, stressing that this product does not affect the core protocol and that integrating CoW Swap aims to improve user experience, protect against MEV, and increase trading volume, ultimately benefiting AAVE token holders. However, Kulechov did not directly answer specific questions about fee sources, revenue sharing from Vault or Horizon.

Aave currently has nearly $34 billion in total locked value and approximately $112 million in annual revenue. The AAVE token price has increased by nearly 7% in the past 24 hours amid the controversy.