Aave founder confirms new token will not be created, citing DAO consensus on Horizon proposal

Aave Labs founder Stani Kulechov clarified on Sunday that a new token would not be created for Aave’s proposed product, Horizon.

The firm recently proposed Horizon, which aims to integrate real-world assets into decentralized finance. A temperature check invited community feedback on Horizon’s RWA product launch that would target institutions.

A contentious part of the proposal suggested that Aave DAO might receive a 15% allocation alongside a revenue-sharing arrangement if a token were created.

This raised concerns that a new token could dilute the value of the existing AAVE token and undermine the focus on AAVE as the sole governance and utility token.

The opposition was strong enough that figures like Marc Zeller of the Aave Chan Initiative publicly stated he would not support the proposal in its current form.

Kulechov took to X to clarify the situation, stating that the Aave DAO had no interest in introducing additional tokens and that the developers would respect this consensus.

“Overall consensus across the Aave DAO is that there is no interest in other tokens. The consensus will be respected; Aave DAO is a real DAO,” Kulechov wrote in an X post on Sunday. "RWA exploration will continue once a right approach is found." 

Several community members have since expressed relief at the decision. They viewed the absence of a new token as a positive move to protect the value and utility of AAVE.

“Glad this got resolved, Aave turned out to be more decentralized than I thought,” said Lito Coen of Socket Protocol.

Aave Labs — part of Avara — developed Aave, the largest decentralized lending protocol. The Horizon deployment under the Avara umbrella was proposed as a licensed instance of the Aave protocol, meaning it will have its own configuration and operational parameters to serve the institutional RWA market.

With the token plan removed, whether Aave Labs would continue with Horizon's deployment is unclear.