The AAVE community has strongly questioned the Horizon plan

The AAVE community has recently raised unprecedented questions about a new plan. Aave Labs recently launched a new initiative called Horizon to develop products that enable institutional adoption of decentralized finance through real-world asset (RWA). The product allows institutions to borrow USDC and GHO at scale using tokenized money market fund (MMF) as collateral. With this product, Aave Labs hopes to further close the gap between traditional finance and DeFi.

However, within days of the proposal's release, the community showed strong opposition to the Horizon plan, especially questions about the potential issuance of new tokens and Horizon's profit distribution mechanism.

! [Aave proposed a new plan for Horizon to promote RWA products, the community exploded, and the founder responded urgently......] (https://img-cdn.gateio.im/webp-social/moments-43f27e8713f8cba23115e950da53cd40.webp)

Horizon Program Essentials

The Horizon program will be available as a licensed instance of Aave V3 and will be migrated to a custom Aave V4 deployment when conditions permit. To support long-term alignment with the Aave DAO, Horizon will implement a structured profit-sharing mechanism, allocate 50% of revenue to the Aave DAO in the first year, and drive ecosystem growth through strategic incentives.

Key design components of Horizon include:

• Licensed RWA token supply and withdrawal mechanism
• Unlicensed USDC and GHO provisioning features
• Stablecoin borrowing and lending for eligible users
• Dedicated GHO facilitator to support on-demand GHO minting
• Licensed liquidation process
• Integration with ERC-20 tokens within the RWA whitelist
• Asset-level permission control managed by the RWA issuer

The profit-sharing mechanism is designed as follows:

• Year 1: 50% allocated to Aave DAO
• Year 2: 30%
• Year 3: 15%
• Year 4 and onwards: 10%

If Horizon issues tokens, 15% will be distributed to the Aave DAO:

• 10% is allocated to the Aave DAO treasury
• 3% for Aave ecosystem incentives
• 2% is distributed to Staked Aave(stkAAVE) holders in the form of an airdrop

The community is strongly opposed

However, the launch of the Horizon program sparked fierce opposition from the community. The main issues at issue include:

1. The profit distribution ratio is too low: The community believes that the profit distribution ratio of only 10% after 4 years is too low, and the rate of decline is too fast.

2. The Need for a New Token Offering: Many members questioned the need for a new token issuance, arguing that it could dilute the value of the AAVE token.

3. Unclear purpose of the new token: The community has questioned the specific purpose of the new token and how it will be governed.

4. Unclear GHO minting process: The community wants to know more about the specifics of GHO minting.

5. Relationship with Aave DAO: There are questions about the relationship between Horizon and Aave DAO and governance permissions.

Aave founder responds

In response to the strong reaction from the community, Stani Kulechov, founder of Aave, responded:

1. Respect the DAO consensus: Acknowledging the community's lack of interest in the new token, the consensus will be respected.

2. Revise the proposal: Commit to revise the proposal based on feedback and find other ways to channel liquidity and income.

3. Emphasize the importance of RWA: Point out that RWA is critical to Aave DAO's revenue and should not be overlooked.

4. Reaffirm the essence of the DAO: Emphasize that the Aave DAO is a true decentralized autonomous organization, and any decision will respect the opinions of the community.

Expert opinion

Crypto researchers point out that the Horizon proposal could be split into more granular subproposals. He summarized the main demands of DAOs:

1. No new tokens will be issued, and funds can be provided by AAVE DAO.
2. Increase the proportion of protocol revenue to AAVE DAO.

Researchers believe that it is a general trend for DeFi protocols to move closer to institutions, and the launch of Horizon is expected to increase the revenue of AAVE DAO. At the same time, Horizon's support for GHO will also expand the market size of AAVE's stablecoin business.

However, the community is concerned that if new token issuances and decreasing profit sharing ratios are allowed, the team may shift its focus to Horizon. The details of the distribution of the new tokens have also raised questions, in particular the speculation that AAVE Labs may receive a significant amount of token revenue from the remaining 85%.

Overall, the launch of Horizon is considered positive, and the key is how the community and the team agree on the distribution of benefits.

! [Aave proposed a new plan for Horizon to promote RWA products, the community exploded, and the founder responded urgently......] (https://img-cdn.gateio.im/webp-social/moments-0a8621eb791da983c9cbdda08ae5c296.webp)