I advocated for implementing revenue share for token holders, and your response was “growth first”; which proved to be disingenuous since the actual priority has been forcing a revenue stream to Labs.
I’m still pushing for genuine revenue share for token holders.
As it stands, our revenue and token model is objectively inferior to Uniswap’s.
What a mess 
while im fine with aave labs taking the revenue stream coming from the product layer that they own, I’m quite disappointed with how it was done in a shadowy way. It should have been brought up for discussion and should have done in a transparent way.
Kudos to @EzR3aL for bring it up to the light.
Hello,
I asked 5 questions I expect 5 clear answers.
I’m adding another one:
Thanks in advance for your clear and direct answers.
I agree with this. Aave is an amazing protocol, and in my opinion will be at the epicenter of the onchain economy and reach hundreds of billions of TVL. The Aave Labs team is doing fantastic work with the Aave app, Horizon RWA vertical which is probably where the largest amount of growth is, and Aave V4.
That said, this dichotomy between Aave Labs and the DAO is unnecessary. In my opinion every action of Aave Labs should be to support the AAVE token - not in the interest of a privately owned Aave Labs company. I get that the Aave protocol is a credible neutral protocol, but this conflict of interest is unnecessary and causes friction. The main concern that a lot of token holders have is whether revenue is taken away from the DAO and flows to Aave Labs, which may have different financial incentives then purely the AAVE token.
It would make much more sense if the amazing developments done by the Aave Labs team would for instance be subsidized by additional AAVE incentives instead of revenue flowing to an organization outside of the AAVE DAO. The regulatory environment is changing significantly - and this whole structure is confusing for a lot of people.
Yeah. I think this Cowswap discussion, MegaETH Deployment, V4 launch and Horizon thread point to a broader pattern.
Aave Labs consistently struggles with communication and just do things.
Stani and the team are great and everyone fully respect the work they do for the DAO. I don’t think they have any ill intentions whatsoever but they do a poor job of keeping service providers and the broader community informed.
When you push stuff out just because you can, everyone will push back. For example, Aave Labs could have included this Cowswap fee updates in their “AL Development Update,” which would have help in the early “Swap Fee“ discussion. But no. Instead, the changes catch people off guard, and Aave Labs ends up needing to over-explain.
A little more transparency around updates like this that affect DAO expectations could go a long way in avoiding friction.
Anyway, I’ll wait for their response to what Marc just asked.
I dont understand your criticism of the uniswap proposal. It does not re-centralize the protocol - governance actually doesn’t change. It only re-centralizes product and tech development, and thats good for all including 3Ps who build apps on top of Uniswap. If anything it means the Labs team is more focused on protocol development and less on app layer building, leaving more room for 3ps to build on it. So its the opposite of what you’re saying. Strongly encourage you to reconsider. Everyone benefits from a re-aligned Aave.
Thanks for posting these questions. I would like to hear very clear answers for them , especially for the question #5
Answering topic by topic here to make it easier to follow:
Regarding the legacy ParaSwap adapters
There wasn’t really a precedent or expectation for regarding the positive slippage between the Aave Labs and Aave DAO as first it was mainly a product feature we wanted from the Aave Labs to enable on our product, and this is why we developed the first iterations of the swap adapters in the first place ourselves.
Indeed, we did set the surplus to go to Aave DAO treasury because we didn’t have the ability to collect it for different reasons but mainly due to regulatory uncertainty at the time. Thus we made the decision that it’s actually better to just provide this windfall to the DAO, for now, as there was also uncertainty as to whether these swap adapters would be a long-term solution for the Aave Labs product (not going into the technical details here). The windfall has been approximately 50-75k per month.
Given that we moved away from this solution in our product we started to invest into building new adapters and integration with Cowswap since a lot of the users were interested in the MEV protection it provides, these ParaSwap adapters became legacy for us.
It is definitely certain that we do want to monetize the Cowswap adapters in the hope that it will sufficiently fund the Aave Labs application, so it can provide the safest experience for users accessing the Aave protocol. This doesn’t need to be funded by the DAO and neither the DAO should take this venture risk.
Regarding the point on whether Cowswap is a better experience to users or not, it’s purely an Aave Labs product decision to make, not the DAOs, since it’s an opinionated product of Aave Labs. We of course do have confidence that the integration provides a better experience. Overall we do believe that MEV protection is great for the users that Cowswap provides out of the box.
On the topic of flashloans : we only deployed the Adapters with Aave FlashLoan Factory, not the Balancer one, and so on any actions on Adapters that requires a Flashloan we enforce it’s an Aave v3 Flashloan and no other source (Just use Aave).
Regarding the application, development and funding
While we don’t want the Aave DAO to pay for the application development or fund anyone else’s business except what is protocol development, we do incur significant costs that not only relates to development but also customer support, product, answering different regulatory enquiries etc. We took the approach that instead of monetizing the protocol related activity, we simply build features around the product that result in better retention and engagement with the protocol to monetize the non-protocol features (not the protocol itself) while keeping access to the protocol extremely competitive and safe.
Regarding the request from the DAO to support certain assets and changes from the DAO, we typically have a dedicated team for this and we integrate what is baseline for the users while keeping the opinionated approach (i.e. design, ux, messaging etc), even when these requests come in a really short term notice (which we also gave feedback to ACI). Especially time consuming are the internal security processes to ensure anything changed on the app, needs to be secure (we don’t want to risk another Safe/ByBit issue).
We do think this is the right approach that the DAO should not take venture risk, neither should pay for the application development and this should be on the shoulders of those who build these products.
And also building a safe and secure product is in line with the DAO’s expectations to see the protocol grow and ensure the stickiness of the protocol by building features into the app that might not relate to the protocol itself.
The ACI team always was aware that the interface had been owned by the Aave Labs team (as stated on the repo and acknowledged in the governance forum by Marc and others multiple times) and this hasn’t been a problem before over the years.
I don’t believe that this has to do anything with privatization, in fact, what we are talking about is purely about Aave Labs own product, not something that is on the protocol layer at all. If everyone’s who builds an application or integrates Aave Protocol would need to pay for all their monetization that are not related to the Aave Protocol, simply because they integrate Aave Protocol in one part of their product, I wouldn’t see motivation for anyone to do so, and also it questions the permissionless nature to build on top of Aave.
There are some direct questions as well that I will provide direct answers:
Aave Vault is simply a 4626 vault wrapper built by Aave Labs and funded by Aave Labs that allows revenue share (and allows set fees to zero as well). This is simply a product build on top of the Aave Protocol that doesn’t affect the existing protocol monetization itself. There are also already open source vaults that can be used, such as one made by BGD Labs. Neither this vault is needed for Aave V4 (not sure why it would) as users can interact directly with Aave V4 via Hubs, similar to Aave V3 markets today. Although we do see value in building vault systems on top of Aave V4 as value added products but third parties.
Aave Labs received an integration grant for building these adapters in the first place and also for integrating into the Aave Labs application and that grant helped to justify using Cowswap and spending our own resources to integrate. This is the sole product decision that relates to Aave Labs and doesn’t affect the protocol in any way. We also consider that CowSwap is the best product in this category out there.
While not related to this topic, Horizon is an instance managed by Aave Labs and its simply up to Aave Labs to decide how to manage the instance as long as it provides revenue for the DAO (this is how white labeling works) as per the proposal voted by the Aave DAO. Also zero Aave DAO incentives has been used so far. Instead Horizon made 100k revenue while still early in few months in and half of that is already accumulated to the Aave DAO. Also if the Aave DAO supplies GHO and sees better opportunities, the Aave DAO can always redirect the GHO, this is Aave finance decision to take at any point. We’re quite proud of Horizon becoming the largest RWA beating all the competition and scaling it to 600M without any DAO incentives so far. This is remarkable.
The Aave V3 liquidation engine works fine as of today, and the Aave V4 liquidation engine is a vast improvement to the existing V3, ensuring that users have a better experience on liquidations. More on the Aave V4 liquidation engine here. Any sort of additional fee the DAO wants to capture can be set by configuration if the DAO decides so. We agree that the Aave V3 is the best protocol out there live, we contributed to this.
Aave Labs owns the Aave trademark, this has been the case for over 8 years and we also actively defend the trademark from any kind of scammers or phishing attempts online, which is a normal and important part of the work to protect the users. Aave DAO in fact can’t own anything. It’s not a legal person, it’s a real DAO that governs the smart contracts of the Aave Protocol.
Regarding the point of sGHO. sGHO can be integrated in a fully permissionless way by any product at the moment. For example, OKX integrated sGHO into their wallet today (Big kudos to @TokenLogic for landing this integration). But overall, I don’t believe this is a question of subisdizing someone particularly, if there is too high a rate on sGHO, it should be the DAO’s decision to reduce that, of course that affects all integrators like Okx and ByBit (and also integrated in the existing Aave web interface) etc. This permissionless nature is exactly what’s needed to gain adoption, otherwise it would be harder to see any growth or appeal of using permissioned systems in regards to sGHO. I personally, prefer to integrate sGHO into our products because it creates more alignment and growth for GHO, Aave’s native stable coin, as a savings system (and competes with sUSDS), which overall should be good for GHO.
The claims about Aave breaching fiduciary responsibilities are nonsense, especially as we actually work day and night to ensure that Aave Protocol is paved with innovation, maintains competitive advantage, and Aave Labs has products that make is safe to access the protocol, enabling billions worth of volume into the Aave Protocol without having any major issues over the past 8 years. Especially as a $AAVE token holder and core contributors, we are fully aligned to grow the protocol, and build products that grow the protocol or increase user retention and this of course means building products that grow the protocol.
while im fine with aave labs taking the revenue stream coming from the product layer that they own
Yes this is a separated layer/product that Aave Labs owns.
It should have been brought up for discussion and should have done in a transparent way
This is very fair feedback and something we should improve in the future.
@stani Can you share what’s the deal with Cowswap?
I just checked a random order I made through the new feature and I see:
25 bps on cowswap partner fees (would these go 100% to aave labs?)
2 bps cowswap fee (Activated a few days ago: https://snapshot.org/#/s:cow.eth/proposal/0x0c70c8cd92accee872b52614b4fa10e3e3214f45c5b6857f7e88e910607a3c1d)
50% on the positive surplus (I see 50% going to me, the other 50% goes to cowswap or aave labs?)
I do see that the aave flashloan fee goes to the aave dao.
Was the conflict of interest between CoWswap’s Stefan George and Aave’s Stanislav Kulechov disclosed? They are both Angel investors in Dune and KPL together, it would be reasonable to assume they are known to each other and may have a personal relationship. Even the perception of a conflict should be avoided.
The funding round also drew a range of angel investors from around the digital asset ecosystem, including protocol founders like Aave’s Stanislav Kulechov, Aragon’s Luis Cuende and Gnosis’s Stefan George, among others.
https://www.theblock.co/post/78563/dune-analytics-seed-round-ethereum
**Our key investors include:
**
Martin Köppelmann, Stefan George & Friederike Ernst, co-founders of Gnosis
Stani Kulechov, founder of AAVE
They were also at the ETH London keynote
Sorry but this is irrelevant to this thread. Of course Stani or other people from the DAO know certain people in this space. So please either focus on the topics matter or im gonna delete comments that do not belong in here.
Who controls what swap solution gets displayed on the website/front end and is front and center and will be used by 99% of users, Aave DAO or Aave Labs?
If Aave DAO is unsatisfied with the current configuration for swaps on Aave, is it an option to develop and utilize use a different solution that sends surplus to the DAO?
I don’t think this should be our first choice as Aave Labs has proven to deliver and is a close ally, but I think it should be a failsafe if Aave Labs continues act unilaterally without even considering the DAO.
Another option is multilaterally agreeing on a split the revenue instead of Aave Labs getting the whole lion’s share. I think something like 90% Aave DAO and 10% Aave Labs for the current solution would create an alignment that seems to be missing here. Also create an agreement that any further changes to percentage allocations would need to go through governance.
You’re missing the point. Aave Labs believes they own the branding and the front-end—everything that happens on the front-end is technically theirs. Their argument is that since the DAO is an abstract entity, like a unicorn, it can’t own real things. Which is partially true.
But how do we fix this? It’s time to establish a Foundation, potentially in the Cayman Islands, that operates under strict mandates from the DAO to have jurisdiction over necessary assets such as: the URL domain, servers, the front-end, etc. $10 million will be more than enough to accomplish all of this—we won’t even use 10% of that sum to cover this development, and in the process, we establish a legal arm for the DAO, which is desperately needed.
You say Aave Labs believes they own the front end. The question is, “do they?”.
If not, I think what you suggest is possible. If they do own the front end and the branding, are you suggesting a sort of hard fork of the brand/front-end?
Hello all,
I am replying on a personal capacity because many technical aspects discussed here have been misrepresented or are outright incorrect so I believe it’s important to make sure everyone is on the same page, in order to have a healthy discussion.
First i want to address ACI allegations that the new swap adapters are using balancer/morpho flashloans, therefore “bringing volume to the competition”. This is factually incorrect and a pretty surprising statement since it’s quite easy to verify the reality onchain. The CowSwap adapters have been deployed with an enforced Aave flashloan factory, therefore from both a flashloan volume and fee perspective, the behavior of the adapters is unchanged. Again pretty easy to verify onchain, as the flashloan factory is available at this address https://etherscan.io/address/0xdeCC46a4b09162F5369c5C80383AAa9159bCf192#code (same address on all the networks). Other users in the thread have already verified how the flashloan fee is correctly collected upon execution. It would be great if for once ACI could validate their claims onchain instead of creating pointless sensationalism.
Second, multiple posts here refer to a “privatized 10M/year revenue flow”. The details of the revenue coming from the paraswap (now Velora) are available in this (great) dashboard by TokenLogic https://aave.tokenlogic.xyz/revenue.
This is the revenue for 2024:
Total: 613,258 USD
Revenue for 2025:
Total: 1,160,615 USD
(Cowswap adapters went live on nov 17th so the last quarter is slightly affected)
So the revenue is an order of magnitude smaller than what has been advertised here.
Also important in my opinion is to discuss how this revenue was generated in the first place: There was never an explicit fee stream to the DAO embedded into the adapters (meaning, there was no onchain, direct fee accrual mechanism for the DAO) neither a direct agreement for fee sharing that was agreed upon with the DAO. The revenue was coming purely from the Paraswap (now Velora) referral program, which shares the surplus of positive slippage trades with referrers (here the details https://docs.velora.xyz/integrating-velora/integrating-velora-overview/fee-sharing#partners-fees-overview). There was never an ad hoc agreement with the DAO, and the result of the integration and consequently the revenue could change tomorrow or anytime Velora decides to modify the terms of the referral program.
I also want to answer this:
SVR liquidations have been a large implementation success and have yielded significant revenue for the DAO. The Aave V3 liquidations are extremely efficient, and the protocol sustained large volatility events (most recently the 10/10 event) without noticeable bad debt accrual. The promoted V4 liquidation engine will be hurtful to this revenue to the tune of 10+ millions of dollars per year. Aave Labs used Aave DAO’s brand assets and social accounts to promote their new V4 liquidation engine and issued communications suggesting that the most Lindy and safest lending protocol liquidation engine was inferior.
Is it safe to expect another large Aave DAO revenue stream will be lost in favor of V4?
I dont even understand whats the point of this question in this thread as clearly has nothing to do with the topic, and i would like to highlight that ACI would already know the answer if they had cared enough to attend the calls that we had for SPs for longer than 10 minutes, or at least take a glance at the docs or the code. Anyway I will once again help, hopefully this trend of having to perpetually educate ACI members will stop at some point. First of all calling “extremely efficient” the V3 liquidations is a pretty gross misrepresentation - you can literally find onchain thousands of liquidations, especially smaller ones, where liquidators could have earned much less and still guaranteed protocol solvency. Overliquidating users is never a good thing, and there are protocols out there outcompeting Aave on this specific aspect already. The goal of the new V4 liquidation engine is to give risk manager options. It can be configured more aggressively (so to be more competitive towards users, but increasing the risk for the protocol) or more conservatively (so to have even more safety) than V3, while still being more gas efficient. Ultimately whether or not revenue will be impacted is only dependent on the configuration risk managers will propose, but this will leave the door open for them to tune it whenever it’s needed to match protocol and DAO needs. This is not something Aave Labs will decide in any shape or form.
I hope this was helpful, the goal is just to present truthful information so that we can have a healthy discussion without fake sensationalism.
EDIT because i just happened to reread this sentence and i find it pretty funny
Aave Labs used Aave DAO’s brand assets and social accounts to promote their new V4 liquidation engine and issued communications suggesting that the most Lindy and safest lending protocol liquidation engine was inferior.
Glissing on the way the sentence is framed that i find slightly amusing, from a purely technical perspective, the Aave V3 liquidation engine is, in fact, inferior, that’s pretty much an objective statement. That doesnt mean that is bad, by any means, but i feel silly even saying this, turns out that new protocol iterations are by design meant to provide better technology than what previously available, and that’s exactly what V4 is for. The DAO in the end paid for this exact reason and it would be disappointing if that wasnt the case. If you need more details to better understand V4 you can reach out as other SPs have been doing, would be nice to have everyone up to speed.
Didn’t the first batch go live in june? https://x.com/aave/status/1929538754189963350
People in here are referring to the CoWSwap revenue size.
Paraswap was much smaller, I agree, as it was only surplus as stated correctly. Nevertheless something that the DAO received.
Personal opinion is that softer liquidations are greater for a user like me. Protocol and revenue wise might differ.
These are the plain, AToken - AToken swaps through the swap widget, not the coll swap/debt swap ones.
People in here are referring to the CoWSwap revenue size.
The CowSwap revenue size is entirely projected and by no means guaranteed, plus it’s in no way a “privatized revenue flow” as this revenue flow simply did not exist. I am not objecting the number if we talk about projections, but presenting it in the way is being used here is misleading.
Just a suggestion, but I think a longer-term structural adjustment could help improve platform management and reduce recurring governance friction as Aave continues to scale.
One possible path is to explore an “Ethereum style” setup where the DAO has a clearer institutional wrapper and reporting cadence, while builders remain free to innovate above the protocol in a free market.
Just a suggestion, but a structure like this could reduce ambiguity, improve transparency and trust, and still keep room for independent builders. I may be missing context, but wanted to share it constructively.
