If you're keeping tabs on the DeFi space, Aave's Horizon market is making waves with its focus on real-world assets (RWAs)—think tokenized versions of traditional investments like bonds or commodities that you can use in blockchain lending. This week, the platform hit a new milestone, and LlamaRisk, a key player in DeFi security, shared the scoop in a tweet that's got the community buzzing.

In their latest update, LlamaRisk highlighted that Horizon's Total Value Locked (TVL)—that's the total amount of assets deposited into the protocol—has climbed past $591 million. That's a solid sign of growing confidence in the platform. Breaking it down, stablecoin supplies are at $294 million, while net borrows sit at around $193 million. Stablecoins are cryptocurrencies designed to hold a steady value, like pegged to the US dollar, making them perfect for lending and borrowing without wild price swings.

Leading the charge are RLUSD and USCC, two assets that are dominating the supply side. RLUSD, a stablecoin backed by real-world assets, and USCC, another RWA token, are being fueled by clever strategies like looping—where users borrow against their deposits to amplify their positions—and tasty incentive programs that reward participation.

Key Incentives Driving the Growth

One of the big draws right now is the incentive programs. For RLUSD, suppliers can earn up to a 15% APY (Annual Percentage Yield), which is basically the return you get on your deposited assets over a year. This campaign kicked off on November 18 and dishes out $40,712 in daily rewards, but it's capped at that 15% to keep things balanced.

On the USDC side—a popular stablecoin from Circle—there's a fresh borrowing campaign offering $1,667 in daily rewards. This effectively knocks down the borrowing cost by about 3.5%, making it cheaper to take out loans. These perks are designed to pump up liquidity and get more users involved in the ecosystem.

Check out the full details on the Aave Governance forum for the nitty-gritty.

Utilization and Parameter Tweaks

Over the past twelve weeks since Horizon launched, borrowing has skyrocketed to $194.3 million. A lot of this comes from users tweaking their positions and new demand for assets like the VBILL token, which is another RWA addition.

Some parameter changes kept things running smoothly: RLUSD's supply and borrow caps got bumped up to 191.2 million and 172 million respectively on November 17. USCC's supply cap also rose to 29 million. These adjustments help manage risk and accommodate more activity without overwhelming the system.

Stablecoin Supply Breakdown

Stablecoin supplies jumped 9.6% to $293.6 million. Here's the split:

• RLUSD: Up 16% to 191.2 million.
• USDC: Up 7.3% to 23.4 million.
• GHO (Aave's own stablecoin): Steady at 79 million.

RWA Supply Trends

RWAs aren't slacking either, with total supply up 6.2% to $301.2 million. USCC led with a 3.2% increase to $256 million, while others like JTRSY (33.2 million), USTB (389k), JAAA (2.5 million), USYC (zero), and VBILL (9.17 million) held steady.

Borrowing Activity

Net borrows grew 3.7% to $194.2 million, with USDC up 12.3% to 17.4 million and RLUSD up 5.4% to 99.7 million. GHO borrows stayed at 77.2 million.

Utilization rates—the percentage of supplied assets that are being borrowed—remained stable, with GHO at a high 97.47%. Supply and borrow rates didn't see big shifts, but the RLUSD incentives did tweak yields a bit lower.

Leverage Looping Profitability

For those into advanced strategies, LlamaRisk shared heatmaps on leverage looping profitability. RWAs like USCC dipped to 5.09% yield, and USTB to 3.67%, influenced by factors like CME SOL futures. These visuals help users spot the best loops for maximizing returns while managing risks.

This update from LlamaRisk underscores how Aave Horizon is bridging traditional finance with DeFi, attracting institutional players and boosting overall liquidity. If you're into meme tokens, keep an eye on how these stablecoin dynamics could influence volatility in the broader market—stable foundations often pave the way for wilder rides in memecoins.

Stay tuned for more updates, and if you're diving into DeFi, always do your own research and consider the risks involved.