The Aave DAO, which manages Aave—one of the leading DeFi platforms—has declined a proposal to establish a new token for the Horizon project, which aims to tokenize real-world assets (RWA) for institutional use. The decision reflects the DAO’s commitment to AAVE’s value and upholding decentralized governance principles.
In a statement on X, Aave’s founder, Stani Kulechov, confirmed the rejection of the new token following significant opposition from the community. He stated:
“Overall consensus across the Aave DAO is that there is no interest in other tokens. The consensus will be respected as the Aave DAO is a genuine DAO. We will continue to explore RWA when a suitable method is determined.”
(Translation: The community stated they did not want additional tokens. The DAO’s integrity and exploratory efforts will persist once an appropriate strategy emerges.)
Despite the rejection of the Horizon token, the Aave institution will advance the original RWA initiative targeting institutional users. This effort is significant considering the burgeoning tokenization market, already worth billions, predominantly operating on Ethereum, Tron, and Polygon.
For instance, Tether has issued over $143 billion in tokens across various blockchains, and more than $235 billion in stablecoins have been recorded according to Coingecko statistics.
The rejection occurred during the initial “Temp Check” phase, where token holders discuss proposals before submitting them for final comments or adopting them as official proposals. The Horizon initiative will utilize tokenized money market funds as collateral, initially deploying on Aave v3 and later transitioning to v4.
The community was expected to deliberate on revenue sharing, proposing to allocate 50% of earnings to the Aave DAO in the first year, tapering to 10% after four years. However, concerns that a new governance token would dilute the current token’s effectiveness led to controversy amongst AAVE holders. Many feared it would detract from AAVE’s utility within the governance framework of the Aave ecosystem.
Moving forward, Aave aims to persist with its RWA project despite rejecting the new governance token due to the community’s input, solidifying its alignment with growing multi-billion-dollar tokenization efforts within the blockchain domain.
