Aave Labs launches Horizon, enabling institutions to borrow stablecoins using tokenized real-world assets, bridging DeFi and traditional finance securely.
Aave Labs officially launched its new platform, Horizon, on Wednesday, August 27, 2025. This new system is designed to allow institutions to borrow stablecoins by using tokenized real-world assets (RWAs) as collateral. It was built on a permissioned version of Aave V3. Horizon is an attempt to provide efficient, compliant, and persistent borrowing services in a decentralized finance (DeFi) system.
Horizon Enables Institutions to Borrow Stablecoins Using Tokenized RWAs
The platform is focused on institutions holding the traditional assets like U.S Treasurys and collateralized loan obligations. Linking them to blockchain-based tools, Horizon opens new opportunities in the form of liquidity and efficiency. Compliance being central to the system allows institutions to operate within regulatory frameworks and enjoy the benefits of DeFi.
The launch is timely. There is a fast-growing global interest in tokenized RWAs. The Boston Consulting Group predicts that up to \$16 trillion in real-world assets could move to blockchain platforms over the next decade. Therefore, Aave Labs created Horizon to support this shift. Specifically, it allows tokenized money market funds (MMFs) to be used as collateral. As a result, institutions can borrow stablecoins such as USDC and Aave’s native GHO. Consequently, Horizon bridges traditional finance and decentralized finance more efficiently.
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Aave Labs founder, Stanislav Kulechov, was excited in the announcement. He claimed that the age of tokenized assets has already started and that Horizon will be the driving force in realizing the future of international finance. The collaboration between the traditional finance (TradFi) and the DeFi, he says, will open up new frontiers of liquidity to Horizon. He further noted that GHO would be an important liquidity provider within the new ecosystem.
Kulechov does not think that in the future every asset will be on-chain. He said Aave is the pillar to this vision. Horizon is not the end goal of a financial system that is fully operational on blockchain networks, and will provide it with speed, transparency, and global access.
Horizon Poised to Transform Traditional Finance with DeFi Integration
The rollout of Horizon follows a clear roadmap. It starts with a licensed version of Aave V3 and will later be switched to a customized deployment when Aave V4 can be used. This gradual transition demonstrates the interest of Aave Labs in innovations and security. As of the DefiLlama data, aave V3 has already handled over $66 billion in assets.
Horizon will distribute the portion of its revenue with the Aave decentralized autonomous organization (DAO) to help Aave contribute to the values of a community. The amount of revenue sent to the DAO will be 50 percent in the first year. However, this will drop to 30 percent in the second year. The profit-sharing model also responds to the previous debates on revenue sharing which emerged in the proposal of Horizon in March 2025.
The introduction of Horizon takes place when the RWA market is experiencing a robust growth. By mid-2025, approximately 26.6 billion in RWAs were tokenized. Horizon also benefits from partnerships with major firms like Chainlink, VanEck, and WisdomTree. Such partners offer real-time asset valuation and guarantee regulation.
Although it faced challenges in the beginning, like the cancellation of an independent Horizon token following community concerns, Aave Labs has changed its strategy. It now centres more on the satisfaction of the institutional needs and at the same time ensuring that they are consistent with the community values.
As GHO is a liquidity driver and as Aave V4 is going to be released, Horizon can be the next stage of institutional adoption in DeFi. It can possibly redefine the interaction between the traditional institutions and digital assets in the future.
