Aave DAO Votes to Keep It Simple, Rejects New Token Proposal

Aave DAO has rejected launching a new token, reaffirming AAVE as the sole governance and utility asset.
Stani Kulechov clarified that the proposed Horizon token is not an Aave initiative but a separate project by Avara.
Aave remains focused on integrating RWAs but will refine its approach based on community feedback.

The Aave DAO has spoken: there will be no new token. The decentralized autonomous organization (DAO) reached a consensus that there is no significant interest in launching a new asset, despite discussions on how a new token could potentially accelerate revenue growth through liquidity bootstrapping.

Why Did the Aave DAO Reject a New Token?

Stani Kulechov, founder of Aave, shared the update in a post on X, making it clear: the team respects the DAO’s decision and will not push forward any initiative that lacks strong community backing.

“Overall consensus across the Aave DAO is that there is no interest in other tokens,” Kulechov wrote.

Clarifications Around Horizon Token

The concerns were clear. Analyst Mika Honkasalo raised the issue that AAVE holders might expect future earnings from any new product associated with Aave.

He likened the situation to a company issuing new equity for a separate product – a move that can confuse investors about the true value.

The “Horizon” Token: A Separate Project

Kulechov clarified that the proposed Horizon token is not an Aave initiative. Instead, it is a separate project by Avara, which aims to acquire a tech license to use Aave’s infrastructure for part of its business.

He acknowledged that there was a gap in expectations but reassured the community that Aave’s focus remains on growing its ecosystem while respecting DAO governance.

Real-World Asset (RWA) Strategy to Continue

While the rejection of a new token is final, Aave remains committed to exploring Real-World Assets (RWAs) as a revenue stream.

Kulechov stressed that RWAs are an important area of growth for Aave DAO. As a result, the team will refine its approach based on community feedback. The goal is to find the right way to integrate RWAs into the Aave ecosystem without compromising decentralization or governance principles.

AAVE Remains the Core Token

Kulechov’s statement highlights that AAVE remains the primary governance and utility token of the ecosystem. “There is only AAVE,” he stated, stressing that the protocol will continue to focus on strengthening its existing token rather than diversifying into new assets.

This decision reinforces Aave’s commitment to decentralized governance and ensures that any future developments align with the community’s long-term vision.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.