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.

Related: Aave (AAVE) Price Prediction 2024-2030: Will AAVE Price Hit $500 Soon?

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.

Related: Aave Chain Initiative Founder Faults MakerDAO’s Proposed $1B Allocation Via Morpho Labs

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