- DeFi lending giant Aave is eyeing the Horizon platform as its RWA protocol.
- Aave Labs has confirmed it has no plans for new tokens for the Horizon initiative.
Stani Kulechov, the founder of Aave Labs, recently disclosed key details about the protocol’s proposed product, Horizon. Kulechov confirmed there was no plan to introduce a new token for the Horizon initiative, citing the DAO consensus.
Why Aave Needs No New Token
The Founder announced the news in an X post on March 16. His comments come amid heated debates about Horizon’s proposal. For context, Aave Labs proposed Horizon as a new initiative building an institutional Decentralized Finance (DeFi) product.
A Temperature Check sought community comment on Horizon’s RWA product launch. A part of the proposal, which is now contentious, suggested that Aave DAO might receive a 15% allocation. This is in addition to a revenue-sharing arrangement if a token were created.
Industry experts quickly raised concerns that a new token could extract value from the existing AAVE asset. They argue a new token would undermine AAVE as the sole governance and utility token. Marc Zeller said he would not support the proposal. He even called on the Aave community to comment on the discussion.
Bringing clarity to the situation, Kulechov revealed that the Aave DAO had no interest in introducing additional tokens. According to the founder, the developers would respect this consensus. “Aave DAO is a real DAO,” says Kulechov. He stated that RWA exploration will proceed once a suitable technique is identified.
The Aave community received the news with excitement, praising the Aave DAO for its intervention. One user, @Kiryu_0x, commented,
Good news. AAVE should be the only token. Multi-token ecosystems are a disaster because investors wonder which token is the better one to buy, and this uncertainty alone can create less investment overall versus if you just had one token.
Aave Lab’s Vision for Horizon
The Horizon initiative, under Aave Labs, proposes launching a Real-World Asset (RWA) product as a licensed instance of the protocol. The initiative aims to have separate configuration and operational parameters to serve the institutional RWA market.
Horizon also seeks to unlock a compliant, scalable, and accessible pathway for institutions and tokenization platforms to engage in DeFi. Aave Labs thinks Horizon will help position the platform as a leader in the RWA space and preferred liquidity and infrastructure layer for institutional DeFi.
Furthermore, Horizon will enable institutions to use tokenized Money Market Funds (MMFs) as collateral to borrow USDC and GHO at scale. However, with token plans now removed, it is unclear whether Aave Labs will continue with Horizon’s deployment.
Meanwhile, Aave Labs’ recent push into decentralized finance has not gone unnoticed. As mentioned in our previous news brief, Aave Labs introduced Sky Aave Force, a proposal to incorporate USDS into Aave V3. This would include native token rewards, providing smooth interactions and distinctive rewards for users.
Additionally, Aave proposed including BlackRock’s tokenized fund, BUIDL, into its GHO Stability Module (GSM). In a previous article, we discussed that this integration is part of Aave’s larger plan to connect DeFi to traditional financial markets.
AAVE, the protocol’s native token, has yet to respond positively to the recent discussions. It dropped 1.4% over the previous day to trade at $170.
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