The founder of Aave Labs, Stani Kulechov, has confirmed that no new token will be created for Horizon, the initiative aimed at incorporating real-world assets into decentralized finance.
In a post shared on March 16, Kulechov announced that the Aave DAO has come to a unanimous decision against the introduction of an additional token for Horizon, and the development team is committed to honoring this conclusion. Horizon was revealed on March 13 as a way to merge RWAs with DeFi while adhering to institutional standards.
The initial proposal included a revenue-sharing framework and a potential 15% token allocation for the Aave DAO. Many community members voiced concerns that introducing a new token could dilute the value of AAVE and detract from its role as the primary governance and utility asset within the ecosystem.
Notable developers and community participants have raised issues, advocating for alternative approaches to generating revenue and liquidity. In response, Kulechov affirmed that Aave Labs would respect the DAO’s position and proceed without launching a new token.
Furthermore, he highlighted that the Aave DAO operates as a fully decentralized organization, where community members play a crucial role in governance decisions.
With the token proposal being withdrawn, the future of Horizon remains uncertain. The project’s original aim was to bridge DeFi with institutional finance by allowing tokenized money market funds to be used as collateral for stablecoin loans.
This initiative was intended to be rolled out as a licensed version of Aave under the Avara framework, ensuring adherence to regulations while maintaining the efficiency and transparency characteristic of DeFi.
Aave’s potential engagement with RWAs is in line with the exponential growth witnessed in the industry. As reported, the value of on-chain RWAs rose by 19% over the last month, totaling $18.63 billion. The value of on-chain treasuries alone surged by 400% in the past year, reaching $4.26 billion.
Tokenized assets are attracting significant investments from major firms like BlackRock. On March 13, BlackRock’s tokenized U.S. Treasury fund, BUIDL, exceeded the $1 billion milestone. Analysts believe the RWA market could evolve into a $16 trillion sector within the next decade, underscoring its potential as a key player in global finance.