Aave Labs Launches Horizon to Unlock $25B in Tokenized Assets with Institutional Compliance and DeFi Liquidity.

Aave Labs has launched Horizon, a platform built on a permissioned version of Aave V3, allowing qualified institutions to post tokenized securities as collateral and borrow stablecoins like USDC and RLUSD. Horizon aims to unlock $25 billion in tokenized assets and combines institutional compliance with DeFi liquidity, providing round-the-clock access and predictable liquidity. The platform has secured partnerships with major players in the industry and supports a broad set of tokenized securities, including U.S. government bond funds and tokenized treasuries.

Aave Labs has introduced Horizon, a groundbreaking platform designed to facilitate stablecoin borrowing for qualified institutions. Built on a permissioned version of Aave V3, Horizon allows institutions to post tokenized securities as collateral and borrow stablecoins such as USDC and RLUSD. This innovative platform aims to unlock $25 billion in tokenized assets, combining institutional compliance with the liquidity features of decentralized finance (DeFi).

Horizon offers a capital-efficient, compliant, and 24/7 borrowing system specifically tailored for regulated organizations. It leverages tokenized U.S. Treasuries and other high-quality funds as collateral, enabling institutions to access stable assets while maintaining the transparency and flexibility of DeFi. This setup provides regular access to cash and stable assets, addressing the liquidity needs of institutions in a decentralized manner.

The platform has secured partnerships with major industry players, including Circle, VanEck, Chainlink, OpenEden, KAIO, Athena, RLUSD, Ant Digital Technologies, and WisdomTree. These collaborations enhance the trust and reliability of the Horizon ecosystem, ensuring it meets the high expectations of institutional investors. Notably, Horizon introduces a new compliance approach by enforcing rules at the token level, allowing only qualified entities to interact with specific assets. This two-layer system balances the needs of institutions for compliance with the push for decentralized innovation.

In addition to its institutional focus, Aave Labs has expanded its presence by launching on the Aptos blockchain. This marks Aave’s first deployment on a non-Ethereum Virtual Machine (EVM) network, supporting its long-term plan to grow across multiple blockchains. Developers on Aptos can now utilize Aave’s proven lending system, benefiting from helpful tools, clear documentation, and the ability to create advanced on-chain financial applications. Aave protocol currently manages tens of billions in deposits across different networks, adding credibility to the growing Aptos DeFi ecosystem.

The launch of Horizon comes at a time when real-world assets (RWAs) are experiencing significant growth, fueled by an increase in Total Value Locked (TVL) on Ethena USDtb and BlackRock’s BUIDL. The RWA sector reflects the increasing demand from investors for safer investment options, a trend that has gained momentum since the collapse of FTX and other top crypto exchanges three years ago. According to a report by Boston Consulting Group (BCG) in collaboration with Aptos Labs and Invesco, the RWA tokenization sector is projected to capture 1% of the global mutual fund and exchange-traded fund market by 2030, equating to $600 billion [1].

In parallel, Kraken has outlined a blueprint for tokenized trading in rare talks with the SEC, exploring how U.S. securities law can adapt to blockchain markets. Kraken met with the SEC’s Crypto Task Force on August 25, presenting a detailed agenda on tokenized trading design, regulatory treatment, and market benefits. The meeting addressed system architecture, lifecycle of tokenized assets, compliance with securities law, and potential advantages like faster settlement, fractional ownership, and reduced costs. This dialogue reflects the evolving regulatory landscape as global jurisdictions advance clearer frameworks for tokenized assets while the U.S. deliberates [2].

References:
[1] https://thecoinrise.com/aave-labs-unveils-a-new-stablecoin-borrowing-platform/
[2] https://crypto.news/kraken-sec-tokenized-trading-us-securities-law/