AAVE community questions the Horizon plan, founder responds that they will respect the Consensus

Recently, AAVE Labs launched a new initiative called Horizon, aimed at developing products that facilitate 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 scale borrowing of USDC and GHO. AAVE Labs hopes to further bridge the gap between traditional finance and DeFi with this product.

However, just a few days after the proposal was released, the community showed strong opposition to the Horizon plan, especially questioning the potential issuance of the new token and the profit distribution mechanism of Horizon.

The Horizon plan proposes 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 thereafter. Additionally, if Horizon issues tokens, 15% will be allocated to the Aave DAO.

However, this proposal has sparked strong opposition from the community. An independent representative of the Aave DAO, EzR3aL, stated that the rate of decline in the profit-sharing distribution ratio is too aggressive. He believes that significant revenue may not appear until the third year and beyond, while at that time the profit-sharing ratio would have already dropped to 10%, which is perplexing.

EzR3aL also questioned the utility of the new token, arguing whether decentralized governance is truly necessary for a licensed market accessible only to qualified institutions. He is also concerned that the AAVE token seems to be abandoned, while another product fully based on the AAVE codebase is being launched.

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 further pointed out that launching a new token for the new business line is a scam.

In response to the community's doubts, Aave's founder and CEO Stani Kulechov stated that the overall consensus of the Aave DAO is not to support the issuance of other tokens. This consensus will be respected, and the Aave DAO is a true DAO. Once a suitable method is found, the exploration of RWA will continue.

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

Crypto researcher @0xCoumarin believes that AAVE's Horizon proposal can be broken down into finer sub-proposals. He points out that the DAO's request is very simple: do not issue new tokens, and the funds to attract liquidity can be provided by the AAVE DAO; the proportion of protocol revenue to the AAVE DAO needs to be increased. He believes that the trend of DeFi protocols moving closer to institutions is significant, and the launch of Horizon can increase the revenue of the AAVE DAO.

Overall, the launch of the Horizon plan has raised concerns in the community regarding profit distribution. While the plan aims to expand institutional access to DeFi, the community hopes to ensure that the interests of existing AAVE token holders are protected while allowing the DAO to receive a fair distribution of profits from this new business. In the future, AAVE Labs and the community need to reach a consensus on these issues to promote the healthy development of the project.