AAVE's new plan sparks community controversy, founder promises to respect consensus

Recently, the highly sought-after AAVE has sparked unprecedented questioning within the community.

Aave Labs recently launched a new initiative called Horizon, aimed at developing products that enable institutional adoption of decentralized finance through real-world assets (RWA). This product will allow institutions to use tokenized money market funds (MMF) as collateral to borrow USDC and GHO at scale. Aave Labs hopes to further bridge the gap between traditional finance and DeFi with this product.

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

According to the temperature assessment proposal introduction, the demand for tokenizing real-world assets is rising due to the ability of tokenization to improve liquidity, reduce costs, and enable programmable trading around the clock. Tokenized U.S. Treasury bonds have increased by 408% year-on-year, reaching $4 billion. It is expected that the on-chain RWA scale could reach $16 trillion in the next 10 years. To meet this growing demand, Horizon proposes to launch an RWA product that operates as a permissioned instance of the Aave protocol.

The Horizon plan implements a structured profit-sharing mechanism. Specifically, 50% of the profits will be allocated to the Aave DAO in the first year, 30% in the second year, 15% in the third year, and 10% in the fourth year and beyond. If Horizon issues tokens, 15% will be allocated to the Aave DAO.

However, this plan has sparked a strong reaction from the community. An independent representative of Aave DAO, EzR3aL, stated that the rate of decline in the profit-sharing distribution ratio is too aggressive. He believes that substantial revenue may not appear until the third year and beyond, while the profit-sharing ratio will have already dropped to 10% by then, which is confusing.

EzR3aL also questioned the utility of the new token, arguing whether decentralized governance is really necessary for a licensed market that is accessible only to qualified institutions. He also questioned how the minting process of GHO will work, as well as the extent of Aave DAO's oversight over Horizon operations.

Other community members have also criticized the issuance of the new token. Some believe there is no reason to dilute the AAVE token, and if a new token is needed, it should maintain a 1:1 relationship with the AAVE token. Others pointed out that launching a new token for a new business line is an inappropriate approach, arguing that if they want cryptocurrencies to be taken seriously, the project needs to start operating like a serious business.

Days after the event unfolded, Aave's founder and CEO Stani Kulechov responded that the overall consensus of the Aave DAO is a lack of interest in other tokens. This consensus will be respected, as the Aave DAO is a real DAO. He promised that the exploration of RWA will continue once a suitable method is found.

Stani emphasized that RWA is an extremely important source of income for Aave DAO and should not be overlooked. He stated that he would revise the proposal to consider feedback and reiterated that Aave DAO is a true DAO, and any preliminary discussions and the consensus reached must be respected.

Some crypto researchers pointed out that AAVE's Horizon proposal can be split into finer sub-proposals. The demands of the DAO are actually very simple: no new tokens, and the funds to attract liquidity can be provided by AAVE DAO; the proportion of protocol revenue given to AAVE DAO needs to be increased. The trend of DeFi protocols aligning with institutions is significant, and the launch of Horizon is expected to increase AAVE DAO's revenue.

Overall, the launch of Horizon is considered a good thing, and the key lies in how the community and the team reach a consensus on profit distribution. This event also reflects that in the field of cryptocurrency, the development direction of projects and the profit distribution mechanism need to consider community Consensus more in order to maintain the long-term healthy development of the ecosystem.