- What?
And re this
Well, if you want to be this nitpicky, it also stated “some” of the important features. Not all features (like new v3 front-end) were listed. This is a bad look.
9 Likes
All service providers should put the DAO first, full stop.
If the DAO and the community wishes that the control of the domain and IP should be handled by the DAO, Aave Labs should compromise on it. Sure, there can be some healthy discussions, if and if so, what percent of the fee should go to Aave Labs, but that decision belongs to the DAO.
I have nothing but respect for the contributions done by the Aave Labs team and I hope we reach a middle ground, but if Aave Labs cannot compromise, I’m afraid I agree with @MarcZeller decision to cut our losses.
15 Likes
Aave Labs is not like any other company or builder building on the product layer.
So while the distinction between protocol and product layer is fair, it should also be abundantly clear that anything branded Aave and funded by Aave tokenholders (Aave Labs) is part of the protocol layer and thus value should accrue first and foremost to the protocol layer. Otherwise you would be double dipping and diluting tokenholders (to your own advantage as you own much more equity)
From there, the protocol should take care to make sure the labs entity is well funded. But that should happen in the open and through governance. Which is also an important element and in fairness also often a under discussed topic. Builders on Aave should make good money from it, DAOs should be more generous with their builders. However, funding should happen out in the open and only after its agreed through governance, particularly when it pertains to the one company that shares the same IP and should operate primarily in service of the DAO (Aave Labs). It should not have a profit motive for its shareholders, only for its builders (so it can make money to pay more to builders or to pay more builders) and for the DAO.
Aave and Aave Labs have an opportunity now to take the DAO in the right direction, evolve it to the next level, or to effectively end AAVE. It’s good and necessary that this discussion is happening now. The ball is primarily with Aave Labs now to make the right decisions. Noone is doubting their capabilities as builders and the community owes them a lot of gratitude and admiration for what they’ve achieved. However, those achievements could all be meaningless, infact it could turn into a net negative, if the DAO’s/Labs interests are not re-aligned.
(edited - keeping the IP discussion here for now as well as to not fracture the discussion)
I opened a separate thread (below) on IP.The DAO should own all the IP, not just license it. The brand/trademark IP and all product IP. This is perfectly possible (the deflection that DAO’s cant own IP is a BS argument, they effectively can and I’m sure the Aave Labs team is aware of that), and there is no good reason this is not the case. It’s tokenholders that funded the buildout of IP. Opened it in other, but might be best moved to governance section. It’s part of this wider discussion, but I think it can stand on its own and is less debatable. Whereas this discussion has a bit more sides to it. So I would argue the IP issue can be resolved asap, while this issue deserves a bit more thinking and discussion. Not as to where the value should accrue primarily (the DAO) and if it should happen through governance (it should), but how the labs entity should be funded sustainably and in a way where they have growth incentive.
Seems moderators deleted the thread… Anyone cares to explain why?? (resolved - triggered normal moderation rules)
6 Likes
Hello, no censorship, your post got flagged by spam as your account is new, your thread has been restored.
Sorry for the inconvenience, moderation is trigger happy because we have a lot of spam, but human element is here to fix issues.
3 Likes
Hi everyone,
Reading through this entire thread, I agree that this wasn’t a protocol change and that product or UI decisions shouldn’t automatically require governance. At the same time, I understand why this was not okay. There was an existing treasury inflow (even if optional or surplus), and that informed how people reasoned about treasury economics over time.
In my 5 years of Governance experience working across ecosystems like Polygon, Filecoin, Avail, Mina (with Aragon), Liberdus, and others… when this kind of tension shows up, we usually handle it by introducing a meta-governance layer. Not more voting, and not governance over every product decision but a simple layer that explicitly lists the underlying parameters that govern shared assets like a treasury or a protocol, and defines what happens when those parameters change.
Practically, this means mapping things like:
– treasury inflows (even optional ones)
– treasury outflows
– admin / executor roles
– multisigs and security councils
– timelocks and safeguards
– other parameters that materially affect control or economics
The distinction is important:
– A new swap integration that doesn’t affect any existing treasury parameter wouldn’t need any process.
– A change that removes or alters an existing treasury inflow does affect a treasury parameter, even if it doesn’t touch protocol code so it should be surfaced to those affected by it (i.e. the DAO).
This doesn’t mean everything needs a vote. In many cases, the process is just disclosure, scoping, and an exit window. So if the community disagrees with a meta-governance change, it has time and clarity to react, including the option to exit, rather than discovering the impact after the fact.
What this creates is a clear framework for everyone: teams know what they can execute on autonomously, the DAO knows when it should expect visibility, and these questions don’t have to be re-litigated every time something changes. What does the DAO and the community think about this idea? Would it help?
6 Likes
AAVE is a fully operational DAO, and meta-governance is likely not a suitable approach. We shouldn’t try to draw inspiration from how non-leaders manage these processes
3 Likes
The inherent conflict between Labs and DAO, even if unintended, is unhelpful and makes it difficult for investors to make informed decisions. It’s worth considering what Morpho did (not Uniswap).
I don’t see how cow swap offer better execution guarantees than paraswap. Plus paraswap/Velora offers MEV protection…
can collateral and debt swaps be added at the protocol level? if so, this product would be redundant. should the dao consider the funding/development of an alternative collateral/debt swap solution the dao owns at the protocol level or product/application level (doesn’t really matter as long as it’s safe, it works, and the DAO gets revenues)? if users want to give their money to the dao instead of to aave labs, they use the alternative solution. aave.com is beautiful, but it by no means the only possible option.
it’s a shame we are here fighting ourselves (at least i thought we were one), but this is where we are. i am of the opinion the way aave labs has conducted itself in regards to removing paraswap revenues without communication (ESPECIALLY THIS ONE), signing a deal with cowswap without communication, sending revenues to themselves without communication to the dao has hurt the aave protocol and aave holders trust as a whole. stani himself says labs “actually [does] focus on holders, and deeply care about the protocol." it was not necessary to do this as secretly as it was done, and it has damaged the protocol level brand and the aave token holders. that too has been admitted to by stani and labs, “It should have been brought up for discussion and should have done in a transparent way”. stani himself says it was not brought up for discussion, and it was not done transparently.
the best solution here imo would be some sort of binding, long-term agreement to share revenues from aave labs products that benefit from the aave protocol. it is clear aave is positioning itself firmly in the camp they do not owe aave dao any of their product level revenue. i believe there is room for negotiation here, but the continued way of doing business from labs is hurting us as a whole.
aave labs builds great products and does an amazing job. i just wish we could ink some sort of deal that leaves both sides a little disappointed but sets the DAO and labs up for long term alignment/success/profit sharing. it’s hard to watch Aave fight itself, and it’s a bit sad as a token holder and believer in the ideals of shared ownership.
aave labs is hurting the aave brand’s reputation at the protocol level with these moves. it is hard to measure, but it is substantial.
5 Likes
Can you provide the argument with justifications. All the swap tx via verola swap are recorded on chain.
A lot of users/LP have incurred heavy loss when dealing with PARAswap. It takes out 20-30bps previous on a simple USDC<>USDS conversion when users do not change the default slippage setting. Only when slippage is set to very low (0.01%-0.03%) then users can execute without heavy losses.
Cowswap on the other hard, do not extract user values like what Paraswap/Velora has done in the past. This is regardless the referral program avara lab with them.
1 Like
USDC to USDS is a 1:1 contract. If the swap engine is using that contract it’s 1:1 minus gas costs. If it’s just searching through random lp’s then there will be some slippage/lp fees. CoWswap likely uses the contract, 1inch does as well. Probably just a matter of an updates for Paraswap to add it. Can’t be done automatically it has to be done manually.
USDS:USDC is a bad example to use. AAVE to USDC would be a better one to compare various apps.
i think aave labs and aave dao should come to some sort of long term, binding agreement on revenue sharing in this case and in all future cases of aave labs products that utilize/leverage/are built on top of the aave protocol.
i think something like this would work:
aave labs commits 25% of revenue generated from all aave labs products built upon the aave protocol to aave DAO.
100% of aave dao revenue received from aave labs products is used to perform aave buybacks.
this solves the issue with aave dao losing a revenue stream as the CowSwap swaps produce more revenue than the previous paraswap implementation where the dao was receiving revenue from swaps.
aave labs still take the majority benefit of their product level applications, so exceptional product building isn’t decentivized.
this increases alignment and delivers a fair percentage of value directly to AAVE token and AAVE token holders in the form of buying back more of the protocol.
in exchange for the majority of revenues on all Aave Labs products, Labs labs transfers website, brand, IP ownership to DAO.
result:
- aave labs keeps 75% of all aave labs product revenue.
- aave dao gets 25% of all aave labs product revenues.
- 100% of aave dao revenues from aave labs products goes to $aave token buybacks.
- DAO owns website interface, brand, IP
this takes a concession from aave labs’ current stance. this reinstates the revenue the dao has lost. this set up is scalable, so both sides win big as the aave protocol and aave labs products push us towards trillions secured.
another option, offer DAO Labs equity:
another option would be aave labs opening the door to aave DAO being able to buy equity in aave labs, so incentives for both sides are more aligned. currently, it is possible for aave labs to buy the aave protocol (as we saw yesterday with Stani’s 50k aave buy). this increases stani/labs’ influence over the protocol through voting power, but that isn’t currently possible the other way around: it is not currently possible for aave dao to purchase aave labs or become a bigger voice in their direction/decisions. but i could see how the dao owning minority share of labs (while still allowing labs to build and execute sharply) would lead to more alignment. that way when aave labs gets more revenue, it is a win for aave holders as well.
2 Likes
Continuing the discussion from Aave Cowswap Integration- Tokenholder Questions:
I’d argue that Aave labs and Avara should belong to Aave DAO and it’s just some legal fiction that was created to comply with the law that led to Stani having his name on the companies directly instead of the DAO.
All income from Avara should go to Aave DAO. Avara can submit a budget to Aave DAO and if it’s generally in line with what other dev teams would cost then Aave DAO can approve it.
This is basically what every DAO does. What DAO has to pay to get their frontend holding company back? If Stani sold most of his Aave tokens such that he doesn’t care if the DAO succeeds or not anymore he doesn’t get to double dip by selling us back our own frontend.
If there are costs to maintain the website or devs Aave DAO will pay them. If there are any revenues or losses Aave DAO will absorb them. The minute we begin treating our legal real world company like it’s separate from Aave DAO we lose.
i’m not sure the case there is strong enough to win in court, but i do appreciate the strength of taking that stance. ideologically, i agree with you. but practically, i’m not sure aave as a whole would function as well if everything aave is given to the DAO. i don’t think we can ignore how good of builders Aave Labs are and how taking away their ownership/autonomy could lead to a decrease in motivation/incentives on the labs side to build on and for the protocol. just something to consider. more than anything, i believe we (the dao and labs) need to stay together and come to an agreement on how to share profits and make each other stronger. i think that means a formal, long-standing, and binding agreement to share revenue and potential upside going forward in a way that gives both sides what they need to sustain and benefit and prevents these types of situations in the future.
In the absolute worst case scenario there are other builders out there. Aave DAO can survive firing it’s labs team and finding a new one. It’s labs team will never find a job with another DAO after trying to blackmail their first DAO.
Also to note, Aave DAO is offering to pay every employees salary. They can all jump to working for us directly or a new Lab team we create. The only one who may take a loss is the person pretending that Aave Labs isn’t owned by Aave DAO. If you have a cancerous tumor it’s best to cut it out immediately rather than let it fester. If whatever Aave tokens Stani has and wage he will request to head Aave labs isn’t enough to keep him with Aave then so be it. Most Founders have 10-20% of tokens which keeps them into the project. If Stani sold his tokens he can’t just double dip and make us reward him for it to keep him interested. I’m fine offering him $500k+ a year to work for Aave, I’m not fine indulging his dream of personally owning a billion dollar company and pretending he never sold tokens to raise money to create Aave.
1 Like
To support community discussion of this topic we have published this post detailing our analysis into the Velora and Cowswap Fee generation from aave.com. A public dashboard has been created and is available here for easy reference. Please note, some data backfilling may still be ongoing leading to some numbers being progressively updated.
13 Likes
Aave Labs (and by extension Stani) have been invaluable to the Aave protocol, no one can take that away from them. They’ve also put a lot of resources and work into the interfaces, so in a way I think it could be justified for them to redirect the interface fees.
However, it’s important to note that historically both BGD and ACI founding members were also part of the Aave Genesis team (I know as i was there!) and the ‘newer’ Aave Labs members don’t have this important historical context. A lot of what was built in the early days were built by the same people still contributing to the DAO today.
So, before there was any ‘real’ DAO, there was only one main way into the Aave Protocol, the aave.com website. I believe the paraswap integration was also done during this time, so the reason there was no DAO discussion was because the DAO wasn’t even properly active at that time. Everyone was working on making Aave the success that it is today, working towards the same goals of growing the protocol.
However now things have progressed, Aave Protocol is massive, the DAO is powerful, and Aave Labs / Avara are hugely successful. There are also great SPs like ACI and BGD, who also host interfaces that are useful for the protocol (merit interface, governance, etc). But these interfaces will never get the same traction for interfaces that are hosted or linked from the ‘official’ aave.com website. And this I think, is where a large tension comes from.
One way to solve this, as has been suggested by some others in this thread, is to have a properly neutral aave.com protocol landing page, where multiple interfaces are given the same (or randomised) share of attention. In this way, BGD or ACI or other SPs could invest in creating their own interfaces (and take whatever fees they deem appropriate), and Aave Labs would be free to continue monetising the products they invest in (e.g. Aave App - which should probably be renamed btw, their main interface, etc). The products/interfaces shown on this could be approved by the DAO or a lighter weight version of it.
Another way to say it - Aave Labs has a monopoly on the normie road to Aave Protocol. Decentralising, or providing space for competing interfaces, may solve these and future issues with monetising products that originate from Aave Labs.
3 Likes
I encourage everyone to move this convo here: [ARFC] $AAVE token alignment. Phase 1 - Ownership - #10 by 0x4444
1 Like
I’m happy this discussion was split into branding/ownership and this original topic paraswap vs cowswap.
For the Paraswap debate specifically, I personally think Aave Labs is on the wrong side of history, and I want to summarize here why:
- The interface was payed for on the retroactive funding.
- The inteface was very actively marketed as “decentralized interface”, with huge emphasis on
app.aave.com, only pointing to some ipfs hash for most of the time. - if you look at the contributions over time, you will see that other SP contributors (tokenlogic, aci, bgd-labs) have contributed significantly to various features, on the common “decentralized interface”.
- Aside from direct contributions, tremendous effort has flown into supporting Avara on integrating new ecosystem contracts like governance v3, umbrella, new stk tokens, migrations(v2->v3, stkv1 → stkv2)
- In addition to these direct contributions, DAO SPs have spent a good amount of time improving paraswap, by optimizing routes and contributing to paraswap-dex-lib/src at master · VeloraDEX/paraswap-dex-lib · GitHub directly integrating GHO-GSMs and boosting Balancer boosted pool usage
Now claiming the ui was never belonged to the DAO is a move that is dishonest and disheartening.
I think any resolution of this dispute that does not result in the DAO receiving back 100% of the funds redirected to Aave Labs on these specific integrations is a loss for the DAO.
If Aave Labs should be able to monetize, and in which form, is a different discussion.
Personally, I think there should be a way.
8 Likes