Crypto Breaking: AAVE DeFi Expansion Moves Forward Without a New Token in AAVE’s RWA Project!

AAVE Labs founder Stani Kulechov has confirmed that no new token will be created for Horizon, AAVE’s initiative to integrate real-world assets (RWAs) into decentralized finance (DeFi). The decision follows strong opposition from the AAVE DAO, which argued that a new token could dilute AAVE’s value and weaken governance.

Horizon’s Institutional Finance Integration

The AAVE DeFi expansion took a major step on March 13, 2025, when AAVE introduced Horizon, a platform aimed at institutional finance integration through tokenized assets. Designed as a regulated instance of AAVE under the Avara umbrella, Horizon ensures compliance with financial regulations while maintaining DeFi’s efficiency.

Unlike AAVE Arc, which is limited to permissioned institutions, Horizon enables hybrid liquidity, where collateral is permissioned, but liquidity remains open. A proposal has been submitted to the AAVE DAO to license an AAVE V3 instance, transitioning to AAVE V4 upon its release.

Originally, Horizon’s revenue model proposed a 50% profit share with AAVE DAO in its first year, decreasing to 10% over four years. Additionally, a 15% allocation of a proposed new token was set for the DAO. However, in response to community concerns, the token proposal was scrapped, ensuring AAVE remains the ecosystem’s primary governance and utility token.

Community’s Reaction and AAVE’s Governance Model

After the Horizon announcement, community members raised concerns that issuing a new token could:

• Reduce AAVE’s governance strength
• Introduce ecosystem fragmentation
• Impact liquidity and utility

In response, Stani Kulechov tweeted on X (Twitter) on March 16, affirming that the Aave DAO voted down a new token and its choice would be honored, with RWA exploration ongoing under the correct strategy. 

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

Crypto Market Trends: RWAs and Institutional Investment

The decision to maintain AAVE as the sole token comes amid rising demand for RWAs. Data from RWA.xyz reveals:

• On-chain RWAs have grown 19% in the past month, reaching $18.63 billion
• On-chain treasuries have surged 400% year-over-year, totaling $4.26 billion

Institutional players are betting on tokenized assets. BlackRock’s BUIDL, a tokenized U.S. Treasury fund, hit $1 billion in assets on March 13, 2025. Experts believe the RWA market will grow to $16 trillion in a decade. With this crypto market trend, AAVE is stepping into the leading role of decentralized finance growth.

AAVE’s Market Performance and 2025 Price Outlook

On March 17, 2025, AAVE trades at $171.37, registering a 0.87% gain daily but a 12.61% fall on a weekly basis. The token’s 24-hour volume stands at $6.74M, and it has a circulating supply of 15 million AAVE.