Latest Aave community controversy: free asset swap becomes charged, DAO demands the recovery of revenue control.

The Decentralized Finance (DeFi) lending platform Aave is facing a strong Rebound from the community. The controversy stems from Aave's recent introduction of a 0.15% to 0.25% transaction fee for the originally free asset swap feature in its official front-end interface, and this revenue is not flowing into the DAO treasury but is being retained by the development company Aave Labs.

This move has sparked widespread discussion in the community about whether “decentralized governance is being undermined,” and has focused the entire DeFi community on a core question: Who truly controls the value and income of the protocol?

From Free to Paid: Major Changes to Aave's Frontend Swap Functionality

In the past, Aave users could perform free asset swaps through its official front end (such as app.aave.com), exchanging USDC for DAI or ETH, only incurring basic DEX slippage and gas fees. This design is seen as an important advantage of Aave, helping users quickly adjust their collateral and debt positions.

However, recently Aave has integrated CowSwap as the default swap route without announcement, and has begun to charge an additional fee of 15-25 basis points (i.e., 0.15%-0.25%) on each swap. Although CowSwap itself can still be used independently and the rates remain unchanged, transactions executed through the Aave frontend will automatically trigger this new fee.

Controversy over Yield Flow: Aave Labs Becomes the Biggest Beneficiary

The community's biggest dissatisfaction is not simply with the fees themselves, but that this revenue does not go into the Aave DAO treasury at all, but is instead directly collected and retained by Aave Labs.

DeFi analyst @DefiIgnas posted on X (formerly Twitter) criticizing this as a “classic case of value extraction” and that it was done without a DAO voting process. He pointed out: “They (Aave Labs) started charging users without any voting and pocketed the profits.”

The community rebound is intense: governance representatives demand transparency and alignment.

Ignas's revelations quickly stirred the DeFi community. Several governance representatives, users, and DAO contributors expressed shock and dissatisfaction, especially as many pointed out that this change was implemented without any formal governance process or Snapshot voting, violating the spirit of Decentralization.

The Aave community governance team Orbit Delegation also stated on the forum that they are reviewing the legality of this move and considering submitting a formal proposal for amendments.

Debate among Multiple Parties: Struggles between Supporters, Critics, and Moderates

This controversy has sparked a debate within the entire Decentralized Finance community regarding the “boundaries between frontend products and governance.” Supporters of Aave Labs, such as @fredcat5150, argue that the frontend is developed and maintained by Aave Labs, and that the team has the right to retain the associated profits. He also reminds DAO holders that there is currently no control over the protocol's brand, domain name, and intellectual property, indicating that power still effectively resides in a centralized manner.

In contrast, @Marczeller (founder of Aavechan) and @LordChampaqui criticized this move as undermining governance trust. They warned that if future versions like Aave V4 remove certain profit-sharing mechanisms, token holders may completely lose their connection to the protocol's revenue.

There are also moderates like @0xhers who advocate for a compromise solution, arguing for the maintenance of Aave Labs' development leadership while introducing a revenue-sharing model, transparency in IP licensing, and protection of DAO sovereignty to achieve alignment of interests for both parties.

Founder response: Kulechov emphasized that there is already a governance process in place and that a vote should be conducted as soon as possible.

Faced with pressure from various parties, Aave founder Stani Kulechov responded to the controversy on X on December 22. He stated that this debate should not fall into endless discussions but should return to the governance process for resolution.

Kulechov pointed out that the relevant fee model has already been discussed for 5 days in the forum, following Aave's “ARFC (Aave Request for Comments)” and “temp-check” governance processes, and is now preparing to enter the formal voting stage. He emphasized, “Everyone is tired; putting it on-chain for a vote is the way to solve the problem.”

He did not directly comment on the reasonableness of the charges, but stated that the front end is a product independently developed by Aave Labs, and that disputes should be resolved through governance decisions rather than unilateral accusations or political pressure.

Latest governance proposal: Request to redirect swap earnings back to the DAO treasury.

With the event escalating, the community has quickly initiated a governance proposal named:

ARFC: Directing Frontend Swap Revenue to the Aave DAO Treasury Snapshot Voting Link

The goal of this proposal is: to request that all or part of the asset swap fees generated by the Aave frontend be directed to the treasury of the Aave DAO, rather than continuing to be collected unilaterally by Aave Labs.

Proposal Highlights:

Governance Demand: The swap profits are part of the protocol value and should be controlled by the DAO.

Reason Statement: Although the front end is developed by Labs, its operation is still built on the Aave ecosystem and brand.

Current issues: lack of transparency in income flow, lack of voting authorization, contrary to the spirit of DAO.

Current progress:

Voting platform: Snapshot

Vote options: Support the introduction of DAO / Oppose maintaining the status quo

If approved, it will enter the technical implementation phase, redistributing the transaction fee revenue mechanism.

This proposal has become a key turning point in the entire event and will also directly test whether the Aave community supports the DAO takeover of product-level revenue sources.

A pivotal moment for governance: Will Aave DAO reclaim revenue dominance?

This incident shows that Aave DAO is facing the most critical stress test in its governance history. This is not only a dispute over a transaction fee but also a value clash regarding how much control decentralized protocols should have.

Regardless of whether the proposal is approved, the issue of front-end revenue attribution for Aave will become a paradigm case of the tension between DAO governance models, product attribution, and core team incentive mechanisms, and it will also provide a reference for other DeFi protocols on the topic of protocol/product separation.

The latest controversy in the Aave community: free asset swaps become paid, and the DAO demands to reclaim the dominance of profits, first appeared in Chain News ABMedia.