Stani Kulechov on Why Aave Is So Successful - Ep.212
Unchained
Intro
This chapter introduces a new format for the Unchained podcast, featuring shorter episodes that cover current events in the crypto world alongside traditional in-depth interviews. Additionally, it promotes their YouTube channel and discusses a multi-functional crypto super app designed for earning and spending digital currencies.
Stani Kulechov, founder and CEO of Aave, comes onto the show to discuss the lending protocol and second-biggest DeFi project by total value locked. Here are some of the highlights:
- How Stani’s background studying law and his passion for fintech led him to the world of smart contracts (1:53)
- Why he decided to transition ETHLend to Aave, and how that eliminated the “meme” narrative (5:55)
- How Stani would explain Aave to a five-year-old, or your normie friend (9:04)
- What new features were released in Aave v2 (15:54)
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- reducing overall gas costs
- aTokens
- swapping collateral
- debt tokens
- What Aavenomics is and how the “safety module” attempts to keep the protocol secure (20:39)
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- How AAVE works as a governance token
- Active versus passive risk in governance staking
- How Aave is transitioning from a centralized to a decentralized protocol (25:01)
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- what he's finding difficult about this process
- issues with voting and an over-reliance on the Aave team
- delegating voting power to what he calls “protocol politicians” and whether this is good or bad for DeFi
- Who is using Aave and how they are using it? (37:27)
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- what OpenLaw is and how OpenLaw contracts work
- how credit delegation, or unsecured loans enforced by law, differ in v2 vs V1
- how people could use lending protocols to build credit
- What Aave plans to do with the E-Money (EMI) license it obtained in the UK (50:51)
- Since Aave was a pioneer in flash loans, which are responsible for the majority of DeFi attacks, whether Stani would do anything differently (53:12)
- Aave’s partnership with tokenized real estate project RealT and how Aave manages it given that, in the US, RealT tokens are securities and can only be sold to accredited investors (58:42)
- How Aave has been thinking about scaling given the high fees on Ethereum (1:03:57)
- Why building a moat in DeFi is impossible (1:07:16)
- What is next for Aave (1:11:40)
Thank you to our sponsors!
Crypto.com: https://crypto.com/
Episode links:
Stani Kulechov: https://twitter.com/StaniKulechov
Aave: https://aave.com
Aave stats: https://aavewatch.com
Protocols mentioned
- ETHLend: https://www.prnewswire.com/news-releases/ethlend-announces-launch-of-new-parent-company-aave-300713825.html
- Aavegotchi: https://www.coindesk.com/defi-game-aavegotchi-preps-for-jan-4-mainnet-launch-with-nft-auctions
- RealT: https://medium.com/aave/realt-market-coming-to-the-aave-protocol-da4499a1e965
- Yearn: https://yearn.finance/
- Uniswap: https://uniswap.org/
- Sushiswap: https://sushiswap.fi/
- Kyber: http://kyber.network/
- Balancer: https://balancer.finance/
- $LINK: https://chain.link/
Aavenomics
- Aave’s documentation: https://docs.aave.com/aavenomics/
- Safety Module: https://docs.aave.com/aavenomics/safety-module
- Summary: https://aave.com/aavenomics/
- More background: https://defirate.com/aavenomics-upgrade/
Decentralization concepts
- Handing off admin keys: https://decrypt.co/46544/aave-officially-hands-over-governance-keys-to-defi-community + https://medium.com/aave/aave-admin-key-handover-3e09e603d348
- OpenLaw: https://www.openlaw.io/
- Protocol Governance: https://www.theblockcrypto.com/linked/73336/defi-lending-aave-token + https://docs.aave.com/developers/protocol-governance/governance
Other topics
- Electronic Money Licence: https://www.theblockcrypto.com/post/75845/aave-uk-fca-emi-license-defi
- Unsecured Loans: https://www.theblockcrypto.com/post/70678/aave-launches-new-service-for-unsecured-peer-to-peer-loans-on-ethereum
- Flash Loans: https://www.theblockcrypto.com/genesis/93740/flash-loans-as-a-capital-boost-tool
Aave Version 2: https://medium.com/aave/the-aave-protocol-v2-f06f299cee04 + https://github.com/aave/protocol-v2/blob/master/aave-v2-whitepaper.pdf
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