Aave founder Stani Kulechov recently took to X (formerly Twitter) to clarify that Aave will not create a new token for its Horizon proposal. This announcement alleviated community concerns about potential dilution of the AAVE token's value and reaffirmed the influence of Aave DAO in governance decisions.
Horizon: Bridging Real-World Assets with DeFi
The Horizon initiative represents Aave's ambitious plan to integrate Real-World Assets (RWA) into decentralized finance (DeFi). The proposal underwent a "temperature check" — a preliminary voting mechanism — to gather community feedback. However, one clause suggesting that "15% of any Horizon token would be allocated to Aave DAO" sparked significant debate.
Community Pushback: Protecting AAVE's Value
Many community members expressed concerns that introducing a new token could:
- Dilute the value of AAVE, the protocol's primary utility and governance token
- Fragment governance power across multiple tokens
- Create unnecessary complexity in the ecosystem
Marc Zeller of the Aave Chan Initiative publicly opposed the current version of the proposal, reflecting broader community sentiment.
Commitment to DAO Consensus
Kulechov's statement emphasized:
- Respect for Aave DAO's clear consensus against new token issuance
- Team adherence to decentralized decision-making
- Continued exploration of RWA integration "once the right approach is found"
The clarification received strong community support, with Socket Protocol's Lito Coen praising Aave's decentralized governance: "Glad this got clarified — Aave is more decentralized than I thought."
What's Next for Horizon?
Key uncertainties remain:
- Development Path: Will Horizon proceed without a native token?
- Institutional Adoption: Can RWA integration succeed under existing tokenomics?
- Protocol Structure: How will licensing work for institutional participants?
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FAQ Section
Why was the Horizon token proposal controversial?
The community feared it would weaken AAVE's position as the protocol's primary governance and utility token.
How does Aave's governance process work?
Proposals undergo:
- Temperature checks (informal polls)
- Formal Aave DAO votes
- Implementation if approved
What are RWAs in DeFi?
Real-World Assets represent traditional financial instruments (like bonds or mortgages) tokenized for blockchain compatibility.
Will Horizon still launch without a new token?
The team continues evaluating options while respecting DAO consensus.
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Risk Disclosure
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