TL;DR

Aave DAO rejects the new token proposal for its Horizon initiative, emphasizing the commitment to preserving the value of the existing AAVE token.
The Horizon initiative aims to integrate real-world assets into DeFi, facilitating institutional participation through tokenized money market funds.
Community concerns over token dilution led to the decision, with Aave Labs affirming, “There is only $AAVE,” to uphold decentralized governance.

The Aave DAO has agreed to reject the creation of a new token for its Horizon initiative. This decision, announced by Aave Labs founder Stani Kulechov, reflects the DAO’s commitment to preserving the value and utility of its existing AAVE token.

Horizon Initiative: Bridging Real-World Assets and DeFi

The Horizon initiative, proposed by Aave Labs, aims to integrate RWAs into DeFi, targeting institutional participation. This ambitious project seeks to bridge the gap between traditional financial systems and DeFi by enabling institutions to use tokenized money market funds as collateral for borrowing stablecoins. The initiative aligns with institutional compliance standards while maintaining DeFi’s efficiency and transparency.

Community Concerns and Consensus

The proposal initially included a contentious clause suggesting the creation of a new token, with a portion of its revenue allocated to the Aave DAO. This sparked concerns among community members about the potential dilution of the AAVE token’s value and a shift in focus away from its role as the sole governance and utility token.

Prominent voices within the community, including Marc Zeller of the Aave Chan Initiative, expressed opposition to the proposal. In response to these concerns, Kulechov clarified that the Aave DAO had no interest in introducing additional tokens.

He emphasized that the developers would respect the DAO’s consensus, stating, “There is only $AAVE.” This decision has been widely praised by the community as a demonstration of Aave’s commitment to decentralized decision-making.

The world of RWAs is surging, and Aave Labs has its sights set on this booming sector. The numbers speak volumes: according to RWA.xyz, the total value of on-chain RWAs has skyrocketed by over 17% in the past month, reaching an impressive $18.13 billion. But that’s not all, unique asset holders are also on the rise, climbing 5% to surpass a remarkable 89,818.

The Road Ahead for Horizon

While the rejection of a new token marks a pivotal moment, the Horizon initiative remains a priority for Aave Labs. The team plans to revisit its approach to RWAs, ensuring alignment with the DAO’s strategic direction.

As the largest decentralized lending protocol, Aave continues to innovate while staying true to its core principles of decentralization and community-driven governance.

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Filed under: News - @ March 17, 2025 11:08 am