Aave Labs Launches Horizon, Enabling Institutions to Borrow Stablecoins Against RWAs

Aave Labs, the team behind Aave, the largest lending protocol in decentralized finance (DeFi) with over $40 billion in total value locked (TVL), has launched a new platform called Horizon, which enables institutions to borrow stablecoins using tokenized real-world assets (RWAs) as collateral.

The platform, built on Aave’s protocol, is designed to operate around the clock while combining compliance frameworks with on-chain liquidity, the firm said in a Wednesday press release shared with The Defiant.

With Horizon, institutions can tap stablecoins using traditional assets, such as U.S. Treasuries and institutional funds, as well as crypto-focused funds and AAA-rated CLOs, thereby putting idle liquidity to work that’s typically locked in slower, legacy systems.

Targeting RWA Growth

Under the hood, the platform uses Chainlink SmartData, starting with Onchain NAV, to automatically track the value of tokenized assets, letting institutions borrow stablecoins in real-time. Aave Labs also plans to add tools like Proof of Reserve and SmartAUM later to facilitate easier risk management.

Aave Labs founder Stani Kulechov said in the announcement that the platform is built for the “growth of tokenized real-world collateral.”

The launch includes a network of partners spanning asset managers, tokenization providers, and stablecoin issuers, including Centrifuge, Superstate, Circle, RLUSD, VanEck, Hamilton Lane, and WisdomTree.

The launch comes as the tokenized RWA market has grown to $26.6 billion, with Ethereum accounting for more than 51% of the sector, according to RWA.xyz.

The largest vehicle is BlackRock’s BUIDL fund, focused on U.S. Treasuries, with nearly $2.4 billion in assets, followed by Tether’s tokenized gold at $1.26 billion and Paxos’ tokenized gold at over $945 million.

Kevin Rusher, founder of RWA lending platform RAAC, told The Defiant in April that the sector surpassing the $20 billion milestone earlier this year was a “strong signal” as it was the only sector in crypto still reaching new all-time highs while most were suffering heavy losses.