Organization behind the decentralized finance (DeFi) protocol Aave, Aave Labs introduced Horizon, a new Ethereum-based lending market that allows institutions and other qualified users to borrow stablecoins against real-world assets (RWAs).
The launch involves participation from several established institutions in tokenized assets and stablecoins, with collateral provided at the start by Circle, Superstate, and Centrifuge, while additional partners include Ant Digital Technologies, Chainlink, Ethena, KAIO, OpenEden, Ripple, Securitize, VanEck, and WisdomTree.
Horizon is built on version 3.3 of the Aave Protocol and is structured to align with regulatory standards for permissioned RWAs, operating as a non-custodial system where smart contracts automate borrowing and lending. The market is designed for two categories of users: institutional investors who can deposit RWAs as collateral and borrow stablecoins, and general participants who can supply stablecoins to earn returns from institutional borrowing activity. Collateral deposits require compliance with issuer-specific conditions, with each issuer setting its own requirements for access and permissions. Once RWA tokens are deposited, Horizon generates a non-transferable aToken representing the collateral position, enabling borrowing of stablecoins within limits defined by loan-to-value ratios that vary across collateral types. In contrast, supplying stablecoins such as RLUSD, USDC, or GHO does not require permission; users receive an aToken for their deposits, which accrue yield and can be withdrawn at any time.
At its initial stage, Horizon supports collateral options from Superstate, including USTB and USCC, as well as from Centrifuge, offering JRTSY and JAAA, with Circle’s USYC scheduled to be added in the near future. Stablecoin liquidity providers can contribute GHO, RLUSD, and USDC to the market.
Circle’s USYC is designed to give qualified investors access to yields derived from a diversified pool of short-term US Treasury securities. Superstate’s USTB and USCC provide yield opportunities through exposure to short-term US government bonds and crypto-based carry strategies. Centrifuge’s JRTSY and JAAA allow qualified investors to earn returns from tokenized US Treasury bills and from AAA-rated collateralized loan obligations.
In order to support accurate valuations, Horizon has integrated Chainlink SmartData, beginning with NAVLink, which supplies precise net asset values for tokenized RWA collateral and facilitates overcollateralized stablecoin borrowing within a regulatory-aligned DeFi structure.
Market risk assessments are managed by Llama Risk, with Chaos Labs also engaged as a provider of risk oversight. The network of institutions involved with Horizon additionally includes Ant Digital Technologies, Ethena, KAIO (formerly Libre), OpenEden, Securitize, VanEck, and WisdomTree.
The protocol incorporates several safeguards, relying on deterministic smart contracts that operate without matching engines, order books, or pricing quotes. Its non-custodial framework ensures that control remains with users and that funds cannot be accessed by Aave Labs.
aTokens representing collateral are non-transferable to comply with issuer restrictions. Administrative functions are narrowly defined and procedural in nature, lacking the ability to authorize trades or reallocate assets, with all privileged actions transparently recorded onchain and carried out under established procedures. Responsibility for whitelisting, identity verification, and asset oversight remains with the issuers.
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