Aave's New Plan Sparks Community Doubts, Founder Responds

Recently, the Horizon plan launched by Aave Labs has sparked unprecedented controversy within the community. This plan aims to develop a product based on real-world assets (RWA), allowing institutions to use tokenized money market funds (MMF) as collateral to borrow USDC and GHO on a large scale. Aave Labs hopes to bridge the gap between traditional finance and decentralized finance through this initiative.

However, shortly after the proposal was announced, the community expressed strong opposition to the Horizon plan, particularly regarding the potential new token issuance and profit distribution mechanism.

Overview of the Horizon Project

According to the temperature assessment proposal, Aave Labs pointed out that the demand for tokenized real-world assets is rising because tokenization can enhance liquidity, reduce costs, and enable programmable trading around the clock. Data shows that tokenized U.S. Treasury bonds have increased by 408% year-over-year, reaching $4 billion. It is expected that the on-chain RWA scale could reach $16 trillion in the next 10 years.

The Horizon project operates as an authorized instance of the Aave protocol, allowing institutions to use tokenized MMF as collateral to borrow USDC and GHO on a large scale, thereby releasing stablecoin liquidity and expanding institutional access to DeFi.

Profit Distribution and Token Allocation Disputes

Horizon has proposed a structured profit-sharing mechanism: in the first year, 50% of the revenue will be allocated to Aave DAO, in the second year 30%, in the third year 15%, and in the fourth year and beyond 10%. Additionally, if Horizon issues tokens, 15% will be allocated to Aave DAO, with 10% going to the Aave DAO treasury, 3% for ecosystem incentives, and 2% distributed as airdrops to Staked Aave holders.

Community Response

The community's reaction to the Horizon plan has been exceptionally strong. Aave DAO's independent representative EzR3aL stated that the rate of decrease in the distribution ratio of profit sharing is too fast, and the purpose of the new token is unclear. He questioned the necessity of decentralized governance in a permissioned market that is only accessible to qualified institutions.

Other 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 even harshly pointed out that launching a new token for a new business line is a scam and is contrary to the operational methods of mature enterprises.

Founder Response

In response to strong opposition from the community, Aave's founder and CEO Stani Kulechov made a statement. He indicated that the overall consensus of Aave DAO is a lack of interest in other tokens, and this consensus will be respected. Stani acknowledged that even if a new token could accelerate Aave's revenue growth through liquidity, it would not generate widespread interest. He stated that the team would revise the proposal to consider the feedback, emphasizing that Aave DAO is a true DAO and that any consensus reached must be respected.

Expert Opinions

Crypto researcher @0xCoumarin believes that the Horizon proposal can be broken down into more detailed sub-proposals. He pointed out that the community's demands mainly focus on two points: no issuance of new tokens and an increase in the proportion of protocol revenue to Aave DAO. He believes that the trend of DeFi protocols leaning towards institutions is significant, and the launch of Horizon will help increase Aave DAO's revenue.

Overall, the launch of the Horizon program has sparked in-depth discussions within the community regarding profit distribution. Finding a balance between promoting innovation and protecting the interests of existing token holders has become a challenge faced by the Aave team and the community.