Aave DAO Debates Control and Revenue Impact Following CoWSwap Integration
Aave DAO is currently engaged in discussions concerning the control and economic aspects of the aave.com interface after the integration of CoWSwap. This integration has redirected swap-related fees away from the Aave DAO treasury, raising concerns about the protocol’s revenue streams.
An Orbit delegate highlighted that frontend fees amounting to about 15–25 basis points are being directed to an external recipient. On-chain data reveals ether distributions associated with CoWSwap partner-fee mechanisms that span multiple networks, potentially generating millions annually. The shift towards CoWSwap’s batch-auction model prioritizes execution certainty over price improvement, which has consequently reduced the DAO's potential surplus.
Aave Labs clarified that the interface is operated, funded, and maintained independently from the protocol itself. While the DAO retains control over on-chain parameters such as interest rates and protocol-level fees, Aave Labs manages optional features including swap routing and interface monetization. Critics argue that monetization linked to the frontend should benefit the DAO as it provides the brand, governance, and development funded largely by tokenholders.
Furthermore, CoWSwap solvers have increasingly utilized free flash loans from Balancer or Morpho, bypassing Aave’s own flash-loan infrastructure and thereby diminishing DAO revenue. Aave Labs emphasized that the Paraswap surplus was never an entitlement enforced by the protocol and ceased following routing changes. They also noted that alternative frontends remain permissionless, the DAO could finance its own interface if it chooses, and that a clearer separation between protocol-governed economics and independently funded features will be established going forward.
