Aave Labs founder Stani Kulechov has recently announced that there will be no new token created for Horizon, Aave’s initiative to incorporate real-world assets into decentralized finance. This decision comes after the Aave DAO reached a consensus against launching an additional token for Horizon, with the development team respecting this outcome. Horizon was introduced as a way to integrate RWAs into DeFi while meeting institutional standards.
The proposal for Horizon included a revenue-sharing model and a potential 15% token allocation to the Aave DAO. However, many community members expressed concerns that introducing a new token could potentially weaken the value of AAVE and shift focus away from its primary role as the ecosystem’s governance and utility asset. In response to these concerns, Kulechov stated that Aave Labs would abide by the DAO’s decision and move forward without issuing a new token.
It is important to note that the Aave DAO operates as a fully decentralized organization where community members play a crucial role in making governance decisions. With the token proposal now off the table, the future of Horizon remains uncertain. The initial objective of the project was to bridge the gap between DeFi and institutional finance by allowing tokenized money market funds to be used as collateral for stablecoin loans within a licensed instance of Aave under the Avara umbrella.
Aave’s venture into RWAs comes at a time of significant growth in the industry. Data from RWA.xyz shows that the on-chain RWA value has increased by 19% in the last month to $18.63 billion, with on-chain treasuries alone experiencing a 400% growth in the past year to $4.26 billion. Tokenized assets have been attracting substantial investments from institutions like BlackRock, whose tokenized U.S. Treasury fund, BUIDL, recently surpassed $1 billion in value. Analysts predict that the RWA market could reach $16 trillion in the next decade, positioning it as a major player in global finance.