Aave DAO Rejects Plans for a New RWA Token: Here’s What It Means

The Aave DAO, the decentralized autonomous organization overseeing Aave—one of the largest DeFi dapps in the world—has rejected a proposal to create a new token for Horizon, a real-world asset (RWA) tokenization project proposed by Aave Labs, the development team behind the DeFi protocol.

In a post on X, Aave founder Stani Kulechov confirmed that no new token will be created for the RWA project following strong opposition from the community.

Overall consensus across the Aave DAO is that there is no interest on other tokens. The consensus will be respected, Aave DAO is a real DAO. RWA exploration will continue once a right approach is found.

There is only $AAVE. pic.twitter.com/tQSb51gmvw

— Stani.eth (@StaniKulechov) March 16, 2025

The opposition to the new token and its active involvement marks a key moment in decentralized governance. This highlights that, despite a perceived decline in focus on DAO systems, some projects still value community input, perfectly aligning with the principles of the blockchain.

Most importantly, the idea failed at the “Temp Check” stage, where proposals are first discussed among token holders before proceeding to the next stage, Aave Request for Final Comments (ARFC), for refinement.

Later, the proposal is usually finalized as an Aave Improvement Proposal (AIP) before the community votes to either pass or reject it.

Aave DAO Rejects Creation of a New RWA Token: What Is Horizon Crypto?

Horizon is an Aave project that seeks to bridge the potentially multi-trillion-dollar RWA tokenization sector with DeFi, creating products tailored for institutions.

Specifically, Horizon allows institutions to use tokenized money market funds as collateral if they wish to borrow USDC or GHO stablecoins. It will initially run on Aave v3 but is planned to migrate to v4 later.

The community was expected to discuss the profit distribution system, which would allocate 50% of revenue to the Aave DAO in the first year, decreasing to 10% after four years.

Additionally, the community needed to address the issuance of a new governance token, an idea that immediately sparked controversy among Aave community members and AAVE holders.

Concerns arose that launching a new governance token would undermine the utility of the OG token, which serves as the governance token and is already one of the best cryptos to buy in 2025.

With a new Horizon token, it was highly likely that AAVE’s role in the Aave ecosystem would be weakened, shifting focus away from the existing ecosystem.

Moreover, there were concerns that the new token would introduce unnecessary complexities, potentially shifting decision-making power away from AAVE holders.

What’s Next?

While the idea of a new token was rejected, Aave is still proceeding with its original plan to create a new RWA project targeting institutions.

This push is bullish for the tokenization sector, where billions of dollars are already on-chain, trading primarily on Ethereum, Tron, and Polygon. There are even more on Solana, a platform hosting some of the best high-risk, high-reward cryptos to buy in 2025.

For example, Tether, the issuer of USDT, has minted over $143 billion worth of tokens across multiple chains. In total, over $235 billion worth of stablecoins have been issued by various projects, according to Coingecko data.

Meanwhile, according to rwa.xyz, over $18.6 billion worth of RWAs have been tokenized, with most of these tokens backed by U.S. Treasuries.

(Source)

One of the leading platforms is Ondo, which also launched Ondo Chain in February. Like Horizon, Ondo Chain aims to integrate DeFi with RWAs, targeting institutions while complying with existing laws. Its token, ONDO, analysts say, is among the best new cryptocurrencies to consider investing in 2025.

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