The Aave CoWSwap integration fees debate has moved into the spotlight after an open letter from Orbit delegate and Aave tokenholder EzR3aL. In a detailed governance forum post, EzR3aL raised questions about how swap fees introduced through the new CoWSwap integration are handled. The discussion centers on whether revenue linked to the Aave interface should benefit the DAO or remain with Aave Labs.

What followed was a clear response from Aave Labs outlining its view on the separation between protocol governance and product ownership. Together, these exchanges have opened a wider conversation about incentives, alignment, and decision making within the Aave ecosystem.

EzR3aL questions fee routing after CoWSwap integration

EzR3aL’s post was framed as an open letter rather than a formal proposal, but it focused on a specific concern tied to the Aave CoWSwap integration fees debate. After Aave Labs announced the integration of CoWSwap into the Aave interface in early December, additional swap fees of roughly 15 to 25 basis points were introduced at the interface level.

According to EzR3aL, earlier swap functionality powered by Paraswap allowed users to swap assets without leaving Aave, while referral revenue flowed back to the DAO treasury without adding costs for users. By contrast, his onchain testing suggested that fees generated through the CoWSwap integration were being routed to an external address rather than the Aave DAO treasury.

EzR3aL shared transaction data and contract metadata indicating that partner fees were directed to an address associated with CoWSwap’s partner fee system. He argued that this change could represent a meaningful loss of revenue for the DAO over time, particularly if similar volumes persist across multiple networks. He also questioned whether the DAO had been consulted before this shift and whether the use of the Aave brand justified a different fee arrangement.

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Aave Labs Explains Protocol and Interface Separation

Aave Labs responded by drawing a clear distinction between the protocol layer governed by the DAO and the product layer represented by the Aave interface. In its reply, Aave Labs stated that the interface operates outside the protocol and has always been built, funded, and maintained independently by Labs.

From this perspective, the CoWSwap integration and associated fees apply only to optional interface features such as collateral swaps. Aave Labs emphasized that core protocol economics, including borrowing and lending mechanics, remain fully under DAO control. The company also noted that operating a large scale DeFi interface involves ongoing costs across engineering, security, infrastructure, and user support, none of which have historically been funded by the DAO.

On the choice of CoWSwap, Aave Labs said the integration was driven by user demand and execution reliability, particularly during volatile market conditions. The batch auction model used by CoWSwap was cited as a way to reduce exposure to MEV and price slippage. Labs also stressed that users are not locked into the interface, since the protocol remains permissionless and alternative or DAO run interfaces are possible.

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Why the Aave CoWSwap Integration Fees Debate Matters

The Aave CoWSwap integration fees debate highlights a recurring challenge in decentralized governance, especially where protocol ownership and product development intersect. While EzR3aL and other delegates have raised concerns about alignment and revenue flow, Aave Labs maintains that interface monetization is necessary to sustain a secure and reliable product experience.

At this stage, no governance proposal has been put forward to change the existing arrangement, and several questions raised by EzR3aL remain open for community discussion. What is clear is that the debate has prompted closer scrutiny of how value is created and distributed around the Aave ecosystem. As Aave moves toward future versions of the protocol and interface, these governance conversations are likely to play a growing role in shaping expectations on both sides.