Aave (AAVE)

Insightful read. While it hard to pack everything in such a short form it give a good context and implications of the situation. While @Marczeller may have a blunt style and doesn’t mince his words, as a $AAVE holder I am glad to have somebody like him and ACI fighting for my interest. It is obviously a nuanced issue but so far I am not convinced by the response from @StaniKulechov and Aave labs. It feels like vague and corporate.

Aave Labs vs DAO, Protocol vs Product On December 4th last year, Aave changed its Swap feature from Paraswap to CowSwap. The issue is that the revenue that used to go to the DAO has been redirected to Labs. This is estimated at roughly $10M per year, Founder Stani Kulechov argued that "the original Paraswap adapter was also developed with its own funds, and the surplus revenue was 'donated' to the DAO, not an obligation"; and also claimed that "Aave(dot)com is Aave's Product, and the Product has the right to monetize its own feature provision". Beyond Swap, there are debates covering Horizon, MegaETH expansion, Vault, V4, etc., which are adding tension to the Aave community. The full text is the post below by @DefiIgnas.

AAVE COMMUNITY PROBES COW SWAP INTEGRATION AND AAVE LABS’ “STEALTH PRIVATIZATION” OF THE PROTOCOL > Before: Paraswap integrations routed surplus execution + interface-driven flash loan fees to the DAO > Now: CoW Swap rollout adds 15–25 bps frontend fees, onchain-traced to a non-DAO address - estimates point to ~$200k/week since mid-2025 Protocol code unchanged. Cashflows changed ACI frames this as stealth privatization of DAO-funded brand + IP. Aave Labs responds that the interface is an opinionated product, MEV-protected swaps improve UX, and monetization is legitimate But the pattern compounds: → CoW swaps rely on Balancer flash loans (zero to Aave) → Vaults may hardcode Labs-only fees → Horizon shows negative net DAO ROI after incentives → v4 liquidation engine could externalize tens of millions/year Nothing illegal. Not a rug. Just DeFi confronting the gap between decentralized governance and centralized value capture

crypto gaming is the most interesting part of crypto rn. clearly https://t.co/IeZGJb1Ed8

Wu said that according to DeFiLlama data, DeFi TVL has fallen from its peak by nearly $50 billion to $122.04 billion. Notably, only four protocols still have TVL above $10 billion, and aside from Aave, the other three are LRT/Restaking. https://t.co/AuWbMBCQg0

DeFi for everyone. https://t.co/mvA8pZK28Y

Resiliency. https://t.co/Bj2cYN0qtr

There is a fight at $AAVE 🥲 AAVE Labs recently integrated CoW Swap as a swap tool on its AAVE website interface. This generates fees estimated at about $200,000 per week. These fees are now directed to AAVE Labs instead of the DAO... Hoping it calms down quickly.

Nice write up on the inner working of @aave V4. It offers way more modularity. One thing though is that for lender, like $USDT supplier to a hub, you still get exposed to the risk of each linked Spoke. And if multiple Hub are created to gather for different risk profile (Spoke link profile) then liquidity is still a bit fragmented. But the new model allow to manage those risk with more granularity and to get more from them.