Stani Kulechov (Aave): "DeFi will become the heart of finance".

👉 The news. The Aave protocol, a leader in decentralised savings and loans, was one of the stars of the EthCC.

👉 The context. DeFi is benefiting from recent scandals in centralised finance (Celsius, Three Arrows...).‍

👉 Why it matters. Aave wants to become one of the bridges to traditional finance.

What did you think of this edition of EthCC?

The Ethereum community keeps growing, it's quite impressive. What I like about the EthCC is that the participants are focused on applications and their development, we talk about projects and very little about markets. This conference allows us to talk about the real challenges facing the community. I took part in several very good debates over the three days, and I saw Vitalik Buterin's keynote, which gave his personal vision of things and how he sees Ethereum in the long term.

Just how do you welcome The Merge and the development of Layer 2 (second layers)? The Ethereum ecosystem looks ebullient...

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Everything that's happening at the moment is very positive. As Vitalik said, Layer 2 solutions have gained in maturity and it's a sector where we're seeing a lot of innovation. Some experiments on Layer 2 are now being implemented on Layer 1. It is no longer necessarily the main chain that is responsible for innovation. One example: we are currently working on projects with StarkNet or Polygon, which we already use, and which enables us to reach a larger number of users thanks to lower transaction fees.

The recent scandals with Celsius and other lending platforms have shown the limits of "CeFi", i.e. centralised finance. Has decentralised finance won the day?

What has happened over the last few weeks is quite simple: platforms have borrowed crazy amounts of money willy-nilly, and from each other. That couldn't last... In DeFi, you can't do that, the protocols are transparent so you see very quickly where the weak links are.

Aave is now a leader in DeFi. How do you explain this success?

It's partly linked to our DNA. From the outset, we have focused on innovation, constantly seeking to improve our applications. We are also a very open community. After Ethereum, we worked with Polygon, Avalanche, and others, integrating new services each time.

You obtained an e-money licence in 2020. What for?

With this licence, we want to bring decentralised finance closer to traditional finance, and so reach a new audience. There are two ways of evangelising the planet. Either you let people come to you, but that can take time, or you go to them, and that's what we're doing. We're working on DeFi services for the general public. The aim is for any user to be able to deposit funds on a DeFi protocol.

Can we imagine a consumer application of Aave?

Adoption is an obsession for us. It's the key, so we're working on simplifying our products. After that, we have to be clear: there's still a long way to go.

So DeFi is going to have to wait a long time before it replaces the banks?

Yes, it's going to take time, because the banks have a lot of customers and fairly efficient interfaces. But decentralised finance is much more efficient and transparent, so gradually the traditional players will get on board. I'm sure that DeFi will become the heart of finance and the banks a gateway to it.

You very recently announced a stablecoin project. How is it better than the others?

The problem with over-collateralised stablecoins is that you earn nothing on the cryptocurrency collateral you deposit in exchange for issuing stablecoins. With GHO stablecoin, your collateral will be deployed within the Aave protocol, allowing you to earn interest on it (as your cryptos will be lent to other users, ed. note). You'll be able to use your entire available portfolio to issue stablecoins.

You've launched Lens Protocol, which allows you to create decentralised social networks. Why is this essential?

As with currency, I think it's essential that we are sovereign over our data and our digital identity. Today the banks own the financial infrastructure and giants like Facebook own the social infrastructure. Today, you can't do without these infrastructures. The aim with Lens is to allow users to freely leave the platforms with their data.

When do you plan to open the platform to the general public?

Very soon!

What would you say to a banker who doesn't understand DeFi?

With DeFi, you own your money and you don't have to go through a third party, like a... banker. Of course, for a banker, that's complicated to understand! (laughs) And then you can choose your services, take out a loan with so-and-so, do a transaction with another, without going through a centralised player.

What do you think of Morpho?

Protocols like Morpho are an excellent thing for Aave, because they allow us to bring more people into DeFi.

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