Is the DeFi Giant Aave Protocol In Trouble and a Price Crash Looms?

Core Viewpoint - Aave is experiencing internal governance conflicts regarding the diversion of swap fees to Aave Labs instead of the Aave DAO treasury, raising concerns about potential losses for AAVE holders and the implications of privatization [1][3][7]. Group 1: Revenue Diversion Issues - Aave DAO members are questioning the revenue diversion to Aave Labs, which is reportedly moving swap fees to a private address controlled by Aave Labs, potentially costing the DAO over $10 million in annual revenue [3][7]. - The integration with CoW Swap has introduced user fees of 15-25 basis points, which are directed to Aave Labs rather than the DAO treasury, contrasting with previous arrangements where surplus revenue flowed to the DAO without user fees [3][7]. Group 2: Community Reactions and Concerns - Marc Zeller, founder of the Aave Chan Initiative, expressed that the situation is "extremely concerning," labeling it as "stealth privatization" of 10% of the Aave DAO's revenue, and raised questions about future revenue from other features [4][7]. - The community is debating the ownership of Aave's revenue and whether DAO-funded service providers have fiduciary duties to token holders, highlighting the ongoing internal conflict over the revenue loss [7]. Group 3: Aave Labs' Position - Stani Kulechov, founder of Aave, refuted claims of stolen revenue, stating that previous ParaSwap fees were a "discretionary surplus" and emphasized that Aave Labs incurs costs for engineering and security, justifying its monetization of products [5][6]. - Aave Labs acknowledged poor communication with the community regarding the changes but defended the decision to switch to CoW Swap, citing improved execution prices and enhanced protection against MEV attacks as key motivations [6].