Aave Labs founder Stani Kulechov has confirmed that no new token will be created for Horizon, Aave’s initiative focused on integrating real-world assets (RWAs) into decentralized finance (DeFi). The decision aligns with the Aave DAO’s consensus, reinforcing the governance model that prioritizes community input.
Aave DAO Rejects New Token for Horizon
In a March 16 post on X, Kulechov stated that the Aave DAO had reached a clear consensus against issuing an additional token for Horizon. The development team will respect this decision, maintaining AAVE as the ecosystem’s sole governance and utility asset.
“Overall consensus across the Aave DAO is that there is no interest in other tokens. The consensus will be respected, Aave DAO is a real DAO. RWA exploration will continue once a right approach is found. There is only $AAVE.” — Stani Kulechov
Horizon, introduced on March 13, aims to bridge DeFi with institutional finance while ensuring regulatory compliance. The original proposal included a revenue-sharing model and a potential 15% token allocation to the Aave DAO. However, concerns arose that issuing a new token could dilute AAVE’s value and shift focus from its central role in the ecosystem.
Community Concerns and Governance Integrity
Prominent developers and community members opposed the new token, advocating for alternative strategies to generate liquidity and revenue within the Aave ecosystem. Kulechov assured that Aave Labs would uphold the DAO’s position and explore other avenues for RWA integration without token dilution.
Additionally, Kulechov emphasized that Aave DAO operates as a fully decentralized organization, allowing community members to steer governance decisions.
Uncertain Future for Horizon and the Expanding RWA Market
With the token proposal abandoned, Horizon’s next steps remain uncertain. The initiative originally aimed to enable tokenized money market funds to serve as collateral for stablecoin loans, providing a regulated pathway for institutional capital into DeFi. It was set to be developed under Avara, ensuring compliance with financial regulations while maintaining DeFi’s efficiency and transparency.
Aave’s potential expansion into RWAs aligns with the sector’s rapid growth. According to RWA.xyz, the total on-chain RWA value surged 19% in the last month, reaching $18.63 billion. On-chain treasuries alone have seen a 400% increase in the past year, now valued at $4.26 billion.
Institutions are increasingly investing in tokenized assets, with BlackRock’s tokenized U.S. Treasury fund (BUIDL) surpassing $1 billion on March 13. Analysts predict that the RWA market could expand to $16 trillion over the next decade, reinforcing its significance in global finance.
Aave’s Next Steps
While Horizon’s development path is uncertain, Aave’s foray into RWAs remains a key focus. The rejection of a new token signals a commitment to maintaining AAVE’s value while exploring regulatory-compliant DeFi solutions. The industry will be watching closely to see how Aave navigates the evolving RWA landscape in the coming months.
