The AAVE community reacted strongly to the new plan Horizon, and the founder responded urgently.

AAVE recently launched a new initiative called Horizon, aimed at promoting institutional adoption of decentralized finance through real-world assets (RWA). The initiative allows institutions to use tokenized money market funds as collateral to borrow USDC and GHO at scale. However, this proposal has sparked unprecedented skepticism within the community.

The main goal of the Horizon project is to bridge the gap between traditional finance and DeFi. With the rising demand for tokenized real-world assets, Aave Labs believes this market has great potential. Data shows that tokenized U.S. Treasuries have grown by 408% year-on-year, reaching $4 billion. It is expected that the on-chain RWA market could reach $16 trillion in the next 10 years.

However, the community has shown strong opposition to the Horizon project, particularly questioning the potential issuance of new tokens and the profit distribution mechanism. According to the proposal, Horizon will implement a structured profit-sharing mechanism. In the first year, 50% of the profits will be distributed to Aave DAO, but this percentage will decrease annually, reaching only 10% in the fourth year and beyond.

In addition, if Horizon issues tokens, 15% will be allocated to the Aave DAO. Among them, 10% will be allocated to the DAO treasury, 3% for ecosystem incentives, and 2% will be distributed to Staked Aave holders in the form of airdrops. This arrangement has sparked strong dissatisfaction within the community.

EzR3aL, an independent representative of Aave DAO, stated that the rate of decline in the profit-sharing distribution ratio is too aggressive. He believes that substantial income may only appear in the third year and beyond, while by that time the profit-sharing ratio will have already dropped to 10%, which is confusing.

Community members have also criticized the issuance of the new token. Some believe there is no reason to issue a new token and that $AAVE itself should be used as the governance token. L1D investment partner 0xLouisT bluntly pointed out that launching a new token for a new business line is a scam.

In response to the strong reactions from the community, Aave's founder and CEO Stani Kulechov addressed the issue. He stated that the overall consensus of the Aave DAO is not to support the issuance of additional tokens, and this consensus will be respected. Stani acknowledged that it is currently clear that the DAO has reached a consensus, and even if a new token could accelerate Aave's revenue growth through liquidity bootstrapping, it would not generate widespread interest.

Stani further pointed out that RWA is a crucial source of income for Aave DAO and should not be overlooked. He stated that he would revise the proposal to consider feedback, emphasizing that Aave DAO is a true DAO and that any preliminary discussions and reached consensus must be respected.

Cryptocurrency researcher @0xCoumarin believes that the Horizon proposal can be broken down into finer sub-proposals. He pointed out that the demands of the DAO are actually very simple: no new tokens, and the funds to attract liquidity can be provided by the AAVE DAO; the proportion of protocol revenue given to the AAVE DAO needs to be increased.

Overall, the launch of Horizon is considered a good thing, but the key lies in how the community and the team reach a consensus on profit distribution. It is a major trend for DeFi protocols to move closer to institutions, and Horizon is expected to increase the revenue of AAVE DAO while expanding the market size of its stablecoin business. However, balancing the interests of all parties and avoiding the negative impacts that may arise from the issuance of new tokens has become the main challenge currently faced.