Stani Kulechov on Why Aave Is So Successful - Ep.212

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)

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)

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)

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)

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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