Aave Bridges DeFi and TradFi with Tokenized Asset Lending Platform

Aave Labs has launched Horizon, a new platform designed to facilitate stablecoin borrowing for institutional investors using tokenized real-world assets (RWAs) as collateral. The platform, which was first announced in March, aims to bridge the gap between traditional finance and decentralized finance (DeFi) by enabling institutions to leverage RWAs such as U.S. Treasuries and institutional funds as collateral. At its launch, Horizon supports borrowing in stablecoins like Circle's USDC , Ripple's RLUSD, and Aave’s GHO, using a range of tokenized assets including Superstate’s short-duration U.S. Treasury and crypto carry funds, Circle’s yield fund, and Centrifuge’s tokenized Janus Henderson products.

This development marks a significant step in Aave’s strategy to capitalize on the rapidly expanding tokenized asset market, which has already surpassed $26 billion. Aave’s founder, Stani Kulechov, emphasized that the platform is designed to provide institutions with 24/7 access, transparency, and more efficient markets through on-chain infrastructure and deep stablecoin liquidity. The tokenized asset market is expected to grow substantially in the coming years as major banks and asset managers move traditional instruments like bonds, equities, and real estate onto blockchain platforms for greater operational efficiency.

Horizon operates on Aave V3, which currently holds more than $66 billion in assets according to DefiLlama data. The platform’s architecture combines both permissioned and permissionless elements, with collateral tokens incorporating issuer-level compliance checks while maintaining open and composable lending pools. This hybrid approach allows for institutional-grade compliance while preserving the composability and openness that DeFi is known for.

A key component of Horizon’s infrastructure is the integration of Chainlink’s oracle services, particularly NAVLink, which provides real-time net asset values of tokenized funds on-chain to ensure proper collateralization of loans. Launch partners include asset issuers such as Ethena, OpenEden, Securitize, VanEck, Hamilton Lane , and WisdomTree , with plans to expand the range of eligible collateral in the future. Ripple’s RLUSD stablecoin is also featured on the platform, with Ripple’s Senior Vice President, Jack McDonald, highlighting the potential to enhance the efficiency of tokenized products through RLUSD’s use as collateral.

Despite the growing interest in tokenized assets, efforts to integrate them into DeFi lending markets remain in early stages, limiting their practical application. Horizon aims to address these limitations by offering a scalable and compliant solution tailored for institutional users. Aave’s position as a leader in the DeFi lending space, with over $62 billion in assets under management, positions Horizon to play a pivotal role in the ongoing evolution of on-chain finance.

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