Aave Labs unveiled Horizon, a new institutional credit protocol, on August 27, merging traditional finance with crypto-based decentralized finance under one roof. Horizon distinguishes itself by allowing tokenized products to be used as collateral. According to Ripple 
$1, the regulated stablecoin RLUSD is central to this structure.
RLUSD Coin: The Heart of Horizon
Aave Labs stated that RLUSD is a critical tool for boosting efficiency in the Horizon protocol. Ripple’s Director for the Middle East and Africa, Reece Merrick, emphasized the significance of stablecoin integration at this scale.
Integrating RLUSD into Horizon not only increases liquidity but also facilitates the institutional-scale adoption of compliance-friendly cryptocurrencies. This scheme establishes a foundation for securely representing traditional investment instruments within the Blockchain.
The use of RLUSD has been expanding rapidly in recent times. In April, Aave enabled RLUSD coins to be used as collateral, generating RLUSD worth $76 million in a single day. Jack McDonald, Ripple’s senior manager of the stablecoin unit, mentioned in July that the stablecoin market growth had reached a critical point.
Bridging DeFi and Traditional Finance
The Horizon protocol aims to align familiar financial instruments with crypto-based solutions for institutional investors. Collaborating with partners like Superstate and Securitize, Aave facilitates the tokenization of assets such as U.S. Treasury bonds, corporate bonds, and money market funds. This creates a more transparent, fast, and accessible financial infrastructure for institutional actors.
The protocol is not limited to RLUSD. It also supports Circle’s USDC stablecoin and Aave’s own stablecoin GHO. Additionally, Circle’s USYC yield fund and VanEck’s VBILL fund offer alternative collateral options. This variety allows users to manage risks more flexibly.
Furthermore, Horizon’s design stands out by combining DeFi’s speed and transparency with the security and institutional standards of traditional finance. Aave Labs’ initiative marks a significant turning point for the broader institutional acceptance of crypto-based finance.
