Aave Cowswap Integration- Tokenholder Questions

Governance
66

Hello everyone, I’m a relatively new member of the Aave community and a small token holder (however % of AAVE in my portfolio is significant).

I’ll try to keep this brief. The ideas outlined below seem fairly logical to me and unlikely to raise major objections. In my view, this is one of the very few reasonable paths forward without resorting to radical measures (such as abandoning the DAO model or mass-selling AAVE tokens).

I believe Aave DAO should select a new Service Provider responsible for the development and maintenance of the frontend. Since Aave Labs will most likely be unwilling to transfer control over the existing website and domain, it would make sense to either launch a fork of the current frontend or build a new one from scratch - provided that all terms and responsibilities are clearly defined “upfront”.

This Service Provider should receive separate funding, and all integrations should be handled transparently either through open agreements with clearly defined revenue-sharing from grants, or directly via grants approved by Aave DAO. There should be no informal or opaque side deals. All code must be open source, with open licenses, detailed instructions, and so on. This ensures that, in case of any violation of the agreements, anyone from the trusted SPs can rebuild the frontend.

Over time, users will naturally migrate to a more open, transparent, and community-aligned alternative. It’s not an easy process, but it’s the best we can get with the current level of decentralization.

There is already a precedent for this approach: the more stable Umbrella frontend developed by @bgdlabs serves as a solid example. If @bgdlabs can deliver a solution within a reasonable timeframe, with a clearly defined budget and agreed-upon rules, this seems like a pragmatic and realistic way out of the current situation.

It is possible that this Service Provider may not have sufficient capacity or expertise, given the relatively limited scope of the project. In such a case, other companies can be engaged, as the market clearly has enough qualified teams capable of taking on this responsibility. That said, preference should be given to reliable and well-proven teams with a strong track record.

P.S. My rough intuition is that developing such adapters would cost around $300-500k plus a similar amount for audits. This is, in my opinion, an order of magnitude (possibly 10-15x) less than the potential revenue losses caused by the current frontend monetization model under Aave Labs. All revenue generated by the new frontend, as well as the fee structure, should ultimately be defined by and directed to the Aave DAO treasury.

P.P.S. This is simply one possible alternative that has not yet been fully explored. I am not claiming that it is the only solution. If @AaveLabs reconsiders its position on this matter, it would be reasonable to put this idea on hold.

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67

the main confusion leading to this point is probably why is aave lab using the same brand as the protocol and DAO if aave lab is a private company? normal users are not able to tell the difference when aave lab promotes their products. and was the aave lab initially seeded by the ICO and which entity actually launched the ICO?

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69

Of course there were policies.
Here the development and proposal for the infrastructure to claim the referral from ParaSwap

The DAO was acting all the time under the assumption that the flow from app.aave.com was towards the DAO.


This is going (again) on the side of corporate answers.
Traffic goes to app.aave.com because it is “Aave”, and that means orderflow goes to it because it is “Aave”. I will be repeating myself, but sure, via an application that needs to be maintained, but 1) it was initially funded by the DAO, 2) there were multiple contributors, and 3) Aave Labs could/can propose a budget to maintain the application. And still, the application is not even the topic (feels like misdirection even), the topic is aave.com and hence app.aave.com. (together with all other “branded” channels).


This is a red herring by the book.
The question is not Aave Labs passing a “partner fee” to the DAO, and definitely not the governance discussion to have for the best interests of AAVE token holders.
The question how AAVE token holders can exercise control & have ownership in all senses of aave.com, app.aave.com, and all other brand/trademark aspects. Then, the owner decides what to do with them, for example, engaging Aave Labs to run content on aave.com, or marketing on socials, or a frontend application on app.aave.com. And obviously, the DAO could decide to compensate Aave Labs for it, via periodic budget, or any other model; with clear boundaries of what can/can’t be done there.


If we want to have a serious conversation about the future of Aave, let’s at least not try to dismiss the evidence (you have your Aave mobile App waitlist as people open aave.com). And also, let’s stop with the argument of “It is undeniable that xyx gives value to the Aave DAO, so that it gives value to somebody else (ourselves) is not relevant at all”.
Sure, users having visibility on the Aave ecosystem is positive for AAVE token holders. That doesn’t matter that by giving visibility, an org gets a wildcard to basically do whatever using all assets that in substance belong to AAVE token holders.

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70

I am a very small holder, and grateful for the hope that Aave and all its contributors bring to a more inclusive financial system.

I am personally very sad that the main gateway to the Aave protocol, which I saw as a way for the entire community to finance and benefit from its use, ultimately seems to be a toll gate in France, the value of which will be drained mainly by private interests…

But now it’s here capturing most of the flow of new users which obviously will not distinguish between aave.app and aave protocol.

IMHO, I don’t think that Aave Labs doesn’t have the community’s best interests at heart, but we must acknowledge their work and the fact that today (despite ourselves) they have a brand image merged with the protocol…

I hope that our currently divergent interests will find a clear and fair common ground.

It’s also a humbling lesson to learn.
We mocked the competition for offering haircuts, while internally we are allowing greed to corrupt our ranks.

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71

@EzR3aL, to answer your questions directly.

  1. No. “If the AIP is approved by the DAO, the Aave team will receive $16,280,000 million in retroactive funding for the development of Aave Protocol V3.” As this sentence, taken from the Compensation Model section of the retro funding proposal, clearly states, the V3 retroactive funding scope did not cover the front-end development costs. Protocol and frontend are two separate codebases, in two separate repositories, with two separate licensing schemes. The front-end engineering in the slide that was referenced, from the Retroactive Funding proposal, was showcasing the structure of the Aave Pod (i.e. the Aave Labs team), as the label “Aave Pod” indicates. In the corresponding snapshot, it states that retroactive funding was applied to the development costs incurred for developing and deploying the Aave V3 protocol itself, including risk features, eMode, and audits. The proposal and snapshot do not mention front-end development costs anywhere.

  2. No, we do not consider it to be viable or scalable to have product-layer decisions and funding to be governed by decentralized decision making. The CoW Swap adapters will continue operating as they are now. We do acknowledge that the DAO received meaningful surplus from the prior ParaSwap (now Velora) route due to Velora’s referral and surplus mechanics. The first order of business is to find a way to restore a similar surplus contribution under the CoW Swap direction. Additionally, in the upcoming weeks, we will share a framework that will clarify how Aave Labs will build and keep scaling its products vertically while always maintaining the interest of the DAO and token holders.

  3. We do not believe that the DAO governing Aave-branded domains is a sustainable long-term approach for users, builders, and the protocol. The protocol is permissionless, and while developer documentation exists, builders do not need governance approval to integrate or build on top of Aave. Aave-branded domains are a user-facing surface with a much higher bar for responsiveness, quality assurance, and user support, which is why they will remain operated by Aave Labs.

This model has given Aave Labs the freedom to quickly build products that have driven the bulk of Aave Protocol usage for the past 8 years, and the protocol revenue from that usage is what has contributed to the funding of the DAO’s service providers and sustained ongoing protocol operations. Thanks to these contributions and the work of many others within the DAO, the Aave protocol has become the largest DeFi protocol ever.

There has been legitimate feedback in this discussion. We’re committed to building the best in-class DeFi user experience, and we’re equally committed to making sure the DAO has a clear, explicit framework to understand how Aave Labs’ product decisions relate to protocol revenue streams.

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[ARFC] $AAVE token alignment. Phase 1 - Ownership
[ARFC] $AAVE token alignment. Phase 1 - Ownership
72

"No, we do not consider it to be viable or scalable to have product-layer decisions and funding to be governed by decentralized decision-making. The CoW Swap adapters will continue operating as they are now.” → Instead of openly shitting on the DAO, could you PLEASE consider doing a rollback while submitting an AIP to request additional funding for hosting the main dApp interface?

The longer we wait, the more irreversible the reputational damage is going to be :person_facepalming:

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73

Let’s go to war then. Your “toy” has been funded since ICO times. Lets make our move first @MarcZeller

“Strike first, strike hard”.

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75

It’s not about fees. It’s about OWNERSHIP.

Labs is only benefiting the competition with their tone-deaf and a clear inability to listen.

From Paul from Morpho:

“It’s a good timing to remind everyone that all Morpho IP, all apps hosted on morpho(.)org, and all our social accounts like @Morpho are owned by the Morpho Association, a shareholder-free entity.

We believe in tokens. We don’t own equity.”
Source: https://x.com/paulframbot/status/1999449640509604343?s=46

Disastrous behavior from the company that should be elevating DeFi standards. They are pushing so hard that they’re forcing us to hard fork the interface and create new branding, while kicking them out of the DAO.

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76

why do both sides want ownership?

a big part of it is for the rights to fees.

but beyond fees, this CowSwap situation is also about power moves, sneaky behavior, and hard handed negotiation: acting first and asking for forgiveness later once the changes have been made, the secrets have been leaked, and the damage has been done. It leads to negative public sentiment for all Aave and opens opportunities for competitors. i don’t believe Labs even told anyone there was a revenue stream lost and then doubly didn’t tell anyone they were getting a new one in the form of fees. They made a deal with CowSwap the DAO doesn’t benefit from. I mean that isn’t technically lying, but they were most definitely withholding information they knew the DAO would be interested in while making moves to bolster their own strategic positioning to more revenue. it would be more beneficial to the brand if these disputes could be avoided in the future because it’s getting aired out publicly, and it’s negative. it also creates distrust within the Aave community. In order to stop stronghanding, some sort of peace treaty is required, some sort of long term agreement about how we split ownership and how business is done. this requires a compromise. an agreement would answer ownership questions definitely in regards to the current CowSwap fees and for future products as well.

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78

For the DAO, maybe there is one lesson to learn from this eye-opening conflict :

Never let a single service provider become "too big to replace”.

And don’t trust (good faith), verify (credit to @EzR3aL :folded_hands:t2:)

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79

I’m just a small AAVE holder and I thank the founders for their past work.

BUT

AVARA can no longer benefit from the AAVE brand, which belongs to the token holders.

AVARA must become AVARA with no mention of AAVE . No more AAveLabs !

The AAVE.com website, the website, and all associated decisions must be governed by the governance, not by an external company which is AVARA.

This year’s events (Horizon token, fees now from aave.com…) clearly show that the DAO’s interests are being trampled.

We must clearly separate the two entities, whatever the cost, and start a new without AVARA !

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80

Ok, we need to cool things down a bit.

Realistically, Aave Labs, Stani, and the team—and the effort they’ve put in—are the reason Aave is such a strong protocol that we’ve all gathered around. DeFi is an opportunity to build something different, and this is one of the rare protocols that actually works and truly delivers on that promise.

This is the moment where we can put the organization on solid foundations—or destroy a genuinely good story.

We should acknowledge the following: the DAO was meant to be the only client and the only customer of Aave Labs. That’s the natural arrangement.
All revenues that arise from the work of Aave Labs and the applications built by Labs should flow—one way or another—back to tokenholders. At the same time, Aave Labs must be fairly compensated, in a way that is tightly aligned with the growth of the protocol’s revenues.

Aave Labs should have the freedom to make certain technical decisions quickly, in line with current conditions, without the burden of bureaucracy and forum processes, so that Aave can remain competitive. A fast and efficient team is clearly needed in the highly competitive DeFi landscape.

All major decisions, of course, should go through the DAO.

Given that all revenues should ultimately accrue to the DAO/tokenholders, an agreement with Aave Labs could be structured as follows:

1. A fixed percentage of total protocol revenues - A percentage that would initially cover operating costs and ongoing work, but could generate excellent revenue for Aave Labs as the protocol becomes more successful
(everyone benefits from Aave being as successful as possible)

2. An annual research and development budget for Aave Labs—giving them the autonomy to decide what applications to build and how to spend it—while, in all cases, any generated revenue flows back to the DAO. An annual report is required before the next grant can be approved.

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81

Well now Aave Labs state clearly that Aave Branded Domain is their own, swap fees is their own. Though in this article that Stani published on behalf of Aave Labs, Swap is clearly part of Aave Protocol.

Based on the above, the conclusion is : Aave Labs Liar@AaveLabs Stani Liar! @stani

When Aave was not as big nor profitable as today, all these revenues went to DAO. Now without DAO’s approval, reallocating these revenues to yourselves, it’s a theft.

Based on the above, the conclusion is : Aave Labs Thief! @AaveLabs

At the same time, it reminds me figures such as Saddam Hussein and Muammar Gaddafi—failed, despicable dictators—who mobilized people under the slogan of “everything belongs to the people,” But after the revolution succeeded, everything ended up ultimately belonging to them and their families.

We are DeFi! We stand against dictators! Down with dictators! Smash dictators!

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82

@Sachi Come on man. :rofl:

This is a healthy discussion. No need for that Sachi. Man, I love Aave so much. :laughing: . Too much drama.

Stani is not a liar. Stani and Aave Labs are builders and we all respect them for everything.

I’m 100% sure that Stani and the Aave Labs will soon come up with a better solutions that works for everyone. I trust the process.

Just use Aave.

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83

A DAO should operate in a way that maximizes value for its token holders. However, in the current situation, Aave Labs seems to be putting its own interests ahead of those of the Aave DAO and AAVE token holders. The website, IP rights, and the brand itself only have value because of the DAO’s role, adoption, and long-term support, which makes it hard to understand how these assets are now being treated as if they belong to Aave Labs. If the DAO’s economic and strategic interests keep coming second, it’s fair for token holders to ask a basic question: why are we holding AAVE in the first place?

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84

For the same issue, giving two different statements at different times means that at least one of them is false. Does not it make a Liar?

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Recent replies from @Sachi do not represent the opinions of the ACI, nor do we support the tone and aggressiveness used.

While every team member is free to express their own opinion, we expect everyone to maintain a professional tone and a constructive approach for the benefit of Aave and its ecosystem.

The goal of the ACI in this debate is to support Aave token holders and the Aave DAO; we have no intention of delving into personal attacks.

The current debate is about trademark ownership and who is rightfully entitled to the monetization of IP, domains, and brand assets. This can be resolved pragmatically without yielding to emotion.

As the stakes are high, I understand that people can become overly passionate after a long weekend, but @Sachi’s comments did not add value to our discussions. We would like to return to a more civil mode of discourse and we asked internally to lead this swift by example.

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87

I hereby declare that all of my previous and future statements represent solely myself.

I would also like to express my gratitude to my boss @MarcZeller for his openness.

Although he does not agree with my expression, he did not suppress my freedom of expression neither.

88

As an investor since the AAVE ICO in 2017, I would like to share my thoughts.
Facts:

  1. Stani planned to issue a new token, but this plan was rejected by AAVE.
  2. Stani mentioned that 80% of Horizon’s revenue would be distributed to Aave Labs.
  3. Aave Labs secretly modified the Aave code, reducing the income of the DAO and increasing the income of AAVE Labs.

Analysis and Conclusion:

  1. Both AAVE Labs and Stani are in desperate need of funds. They are doing everything possible to benefit from the income of the Aave brand and the Aave DAO, even going so far as to harm the interests of Aave DAO and the token holders.
  2. Stani always uses the excuse that the Aave DAO has no physical entity to seek excessive benefits for himself and Aave Labs. The previous 80% share for Horizon was also given as such an excuse. Although the share for Horizon has been reduced to 50%, it is still obviously very high.
  3. The financial problems of Aave Labs and Stani have nothing to do with the Aave DAO. Lens is definitely not going to succeed. Stani has also heard that he has financial problems. If you are short of funds, why not come and seize the income of Aave DAO?
  4. Since Stani and AAVE have no bottom-line for stealing benefits, and they are in desperate need of funds, what if Aave Labs goes bankrupt one day? What if Stani has an accident one day?
  5. We must be prepared for alternative solutions to lose Aave Labs and Stani. We need to start preparing now.

What we need to do:

  1. Since AAVE DAO has no physical entity and cannot hold the AAVE trademark and domain name, the DAO should invest in establishing an entity to obtain the AAVE trademark and domain name. It can negotiate with Aave Labs and either purchase directly or pay annually after the purchase. The trademark and domain name must be in the hands of the DAO. Otherwise, similar theft incidents will occur frequently in the future.
  2. If Aave Labs is unwilling to provide the brand and domain name, we can change the name and use a new domain name and trademark, and abandon the AAVE trademark and domain name.
  3. Immediately look for other partners that can replace Aave Labs for development to take over the related work lost by Aave Labs and Stani, and ensure that the protocol functions are in a normal state.
  4. Any future cooperation with Aave Labs, the related costs must be reviewed by a third party. We can find several partners to jointly quote, and it must not exceed the average standard.
  5. For the current cooperation with Aave Labs, all the income, rights, responsibilities, and obligations of Aave Labs must be clarified. We can find a third-party auditing company to review the code. If Aave Labs’ operations are excessive, we can vote to change.
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89

I agree that additional features outside the protocol, such as collateral swaps and interfaces, can be freely customized or monetized, as long as they are not funded by the DAO.

However, Aave Labs is paid by the DAO, correct?

Also, it should not be run on the main website, or appear to be run on the main website just because it contributes to revenue…

The main website should be redesigned into a neutral information and coordination center for multiple interfaces, and managed by the DAO, not by Labs as it is currently, which only directs to one interface to interact with the protocol, namely the one managed by Aave Labs itself.

In a decentralized world, anyone can create a front-end interface, and something like DeFi Saver should also be promoted on the main website…

Avara is just one service provider, not the only one, and this needs to be explained more clearly. Let’s learn a little from the ethos of Liquity. If necessary, create a new main website for Aave.

I think this is a good first step, because there’s no need to be so aggressive that we lose Aave Labs.

This is the right time to become more like a DAO.

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