The Horizon initiative connects institutional investors with decentralized finance by tokenizing assets like securities, bonds, and real estate. This approach aims to boost liquidity and democratize access to previously illiquid markets.

Aave places significant emphasis on regulatory compliance, incorporating KYC and AML measures to facilitate institutional engagement in DeFi, addressing prevailing barriers for larger participants.

The Horizon initiative may face challenges such as regulatory uncertainties and security concerns, yet it represents a forward-looking strategy for Aave, aligning with the larger trend of asset tokenization in the financial sector.