tl;dr
Aave Labs has launched Project Horizon, aiming to integrate institutional Real-World Assets (RWAs) into DeFi. The initiative seeks to bridge DeFi with institutional asset issuers while ensuring compliance and transparency. It allows institutions to use tokenized money market funds (MMFs) as collater...
Aave Labs has launched Project Horizon, aiming to integrate institutional Real-World Assets (RWAs) into DeFi. The initiative seeks to bridge DeFi with institutional asset issuers while ensuring compliance and transparency. It allows institutions to use tokenized money market funds (MMFs) as collateral for borrowing stablecoins. Aave plans to launch a licensed instance of the Aave Protocol through the Aave DAO to support this initiative. The RWA solution will initially operate under Aave V3 and eventually transition to a custom Aave V4 deployment.
Aave Labs' expansion into RWAs coincides with significant growth in the sector, with the total value of on-chain RWAs surging over the past month. Analysts predict the RWA market could scale to $16 trillion over the next decade. Major institutions such as BlackRock have already issued substantial tokenized assets through its BUIDL product.
Project Horizon is designed to align with institutional compliance requirements while preserving DeFi’s efficiency and transparency. The initiative introduces a structured pathway for institutions and tokenization platforms to leverage decentralized finance securely. One of its core features allows institutions to use tokenized money market funds (MMFs) as collateral when borrowing stablecoins like GHO and USDC. Future plans include expanding to other forms of RWAs and further enhancing institutional access to DeFi liquidity.
Horizon will implement a profit-sharing mechanism for long-term sustainability, allocating 50% of its first-year revenue to the Aave DAO. Additional incentives will also be introduced to drive further ecosystem adoption.
Aave Labs’ expansion into RWAs comes amid significant growth in the sector. Data from RWA.xyz indicates that the total value of on-chain RWAs has surged 17.51% over the past month, reaching $18.13 billion. Analysts predict the RWA market could scale to $16 trillion over the next decade, highlighting its growing role in global finance.
Recognizing this trend, major institutions such as BlackRock have already issued substantial tokenized assets through its BUIDL product.