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 sponsor! 

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Episode links: 

Stani Kulechov: https://twitter.com/StaniKulechov

Aave: https://aave.com

Aave stats: https://aavewatch.com

Protocols mentioned

Aavenomics

Decentralization concepts

Other topics

Transcript:

Laura Shin:

Just yeah, I’m still learning, but anyway, okay, now, we’ve got it all down, this is going to be perfect.

Stani Kulechov:

Yes.

Laura Shin:

Hi everyone, welcome to Unchained, your no hype resource for all things crypto. I’m your host, Laura Shin, a journalist with over two decades of experience. I started covering crypto five years ago, and as a senior editor at Forbes, was the first mainstream media reporter to cover cryptocurrency full-time. Subscribe to Unchained on YouTube where you can watch the videos of me and my guests, go to youtube.com/c/unchainedpodcast and subscribe today.

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Laura Shin:

Today’s guest is Stani Kulechov, founder and CEO of Aave. Welcome, Stani.

Stani Kulechov:

Thanks for having me here, Laura. Happy to be.

Laura Shin:

You have an interesting background that pulls together several strands that touch on different knowledge areas relevant to crypto, why don’t you tell us how you got your start in this space?

Stani Kulechov:

Yeah, definitely mine is not a usual background in our industry. Well, everyone has quite a unique background here, but I started probably 4-1/2 years ago getting into this space practically in the product side and building protocols in decentralized finance, and actually, I found Ethereum when I was still studying law, so by education, I’m a lawyer, and during my last years of my studies, I wanted to understand better how we could make contracts, like legal agreements, more efficient. As part of my research I tried to research AI and a bunch of other automatization, but I stumbled upon Ethereum and smart contracts, and the idea of immutable contracts and code made a lot of sense to me in form of execution that you always have legal agreements kind of like that execute no matter what. And before that, actually, funny, I was building before law school financial applications in Fintech, which focuses more on user experience, and somehow, there’s sort of regulation involved in Fintech, so ended up kind of getting more excited, like understanding more of the legal and jurisprudence side, and that’s how I ended up all the way here.

Laura Shin:

Yeah, and I think it’s interesting because when I look at Aave, I feel like I can kind of see that background coming through, you know, especially like right now, at this time, in crypto, where a lot of stuff that needs to be built in crypto actually does look more like fintech because you need to connect this new financial system to the traditional one, but let’s also talk about kind of this little interim period where you had started a different project called ETHLend. What was that, how did that lead you to Aave, and then I’m very interested to hear you tell the story of how you managed that transition from one project to another.

Stani Kulechov:

Well, it started mainly when I definitely started to practically understand more smart contracts and how they work, and because I always like tried to solve kind of an idea that how you make legal agreements more efficient, but I quickly realized that actually what smart contract can do, they can actually provide more efficiency into finance. One of the things I tried to kind of like understand, like how we could make a kind of on-chain smart contract where there is a lending transaction, where the actual borrower has an incentive to repay back the loan, and normally, it’s not so obvious because Ethereum how it is, it’s practically sort of anonymous, so addresses do not have any identities, so it’s very hard to do any kind of lending or loan transactions, and what we kind of realized is that actually you could use borrowers cryptographic assets as a collateral, post a collateral as a borrower, receive funds from the lender, and then, as there’s more collateral in the protocol, your incentive was to repay to get back your collateral, whatever it is. Back during that time, there wasn’t that many different collateral types, but the idea of work, I mean the whole DeFi space is more or less about over collateralization and collaterals in essence, so it was just a small proof of concept that we developed and evolved into a community, and then just evolved into something else. I never wanted to do a startup like this, that was not my plan at all.

Laura Shin:

And so, how did you decide to transition from ETHLend to Aave?

Stani Kulechov:

It was a difficult decision because, I mean, when we created the ETHLend product, it was very early, it was 2017, and we kept building it, but you know, we were practically creating a product into a market where the ecosystem wasn’t kind of wide enough. There wasn’t many users, and there wasn’t even stablecoins, so people were kind of posting collaterals and borrowing ETH or practically USD pegged ETH, you know, it was a very challenging environment, plus the user experience wasn’t as good as it is today. If you look at Aave today or Uniswap, we didn’t have that kind of thing, and what we realized during 2018 is that as the ecosystem started to grow is that a pooled model makes a lot of sense, and this is what, for example, Uniswap had, and we understood that now that the collaterals that are on Ethereum are getting more and more market capitalization, and what essence this does is that you could actually pool the liquidity and pool the risks, and at that point, we decided to build Aave. We actually rebranded first because ETHLend in some way was actually also kind of like a meme, it was just here for Ethereum lending, and it was a funny name back then that you could lend out Ethereum and people return it, and it was a bit of a meme, and we just wanted to have some kind of like a branding that it was easy and recognizable and maybe at some point even something that is easy also for the mainstream, if we are willing to go that far.

Laura Shin:

And so, then, how did you decide to make the transition to Aave and how did you even message that with the community?

Stani Kulechov:

Well, practically, at some point, we just decided like, you know, what steps we should do. I mean, we started to discuss with the community like what kind of naming options we could have, like what kind of branding we could have, and at that point, we were even thinking like should we hire actually like a branding agency that could just make some sort of like a facelift and come up with the branding, and we actually heard a lot of people and received offers, but eventually, we wanted to do something ourselves. At some point, we just went to the community and said that, hey, this is what we have in plan, and this might be very interesting, and people loved that because somehow our community always understood that it’s more than just ethereum lending. I think it’s just a community that pushes you like further than you want to be, you know, you want to focus quite a lot, but there’s so many things happening, and your community wants you to like spread in multiple ways and do everything, which is kind of like we’re also excited to do a lot of things, at the same time, but there’s just not enough bandwidth to do things securely.

Laura Shin:

So, now, Aave is the second largest DeFi protocol after MakerDAO, has about 5 billion dollars locked in it, and so, actually, I was originally supposed to interview you last summer, and for various reasons, just like the news changed, I wanted to do something that was kind of a little bit more just breaking news, at that moment, but I looked back at that original script I had written, and even just, you know, last summer, it said, Aave was the fifth largest DeFi protocol and it had 150 million dollars locked in it. So suffice it to say that Aave has seen really fast growth, but I’m just curious why don’t we have you describe…because I tweeted that, you know, I was going to interview you, and a number of people said, have him explain Aave the way he would to a 5-year-old or someone said to his normie friends, so why don’t you take a stab at that.

Stani Kulechov:

Well, I usually explain very simple that with Aave you practically see your crypto grow, that’s about it because technically what it is, I mean, you practically deposit cryptographic assets and you get yield, but the end of the day, the yield is in form of getting more of that particular crypto, so if it’s ETH, you get more ETH, if it’s, let’s say, stablecoins, you get more stablecoins, so I just explain that, you know, it’s a way to grow your holdings, you know, not just like in value but in quantity, and it’s that simple, basically. It’s just like, of course, there’s the lending part, someone is on the other side consuming, you know, and those kind of things, but in essence, it’s just very much depositing funds and getting yield, and you will see your crypto grow, and actually, this happens very directly because the way we designed the protocol is that if you deposit assets, you get aTokens in return, so 100 USDC means that you get 100 aUSDC, and we actually developed this algorithmic formula, which means that you will see every second your balance increase wherever you’re holding those assets, so it could be on your MetaMask, cold storage, you will always see the balance increase depending on how often on how often your wallet provider is calling the balance of that asset. That’s like a very unique way to treat assets because normally that happens in banking but not so often in our space.

Laura Shin:

And so, Aave, in a way, is imitating banking, right, people deposit and then…?

Stani Kulechov:

Yeah, I would say what we are trying to do is we are trying to not imitate, but we are trying to kind of like fix the backend of finance in general, so let’s say when I used to work in fintech, what we were focusing quite more heavily is pretty much like the user experience, so how to make the user experience in finance better, and this is what neo- banks have been doing and all the challenger banks, electronic money providers, and what not, and all this fintech is trying to solve, like improving the user experience, but everything else is held by the financial infrastructure, and that is not moving anywhere. What Aave is doing and also kind of like others in the DeFi space is actually taking that kind of like a backend of finance and improving that, so making it, first of all, open, that is accessible to everyone to participate, to build upon, so you get developers from all parts of the world and have this kind of like transparency, that is like what we are in essence trying to solve as Aave and DeFi, in general.

Laura Shin:

Yeah, and one thing I was looking at is in terms of how quickly Aave has grown, I think something that’s interesting and impressive about it is that Aave’s closest competitors Maker and Compound, which at the moment, rank first and third in terms of total value locked, both have Silicon Valley backing, they both have investment from Andreessen Horowitz, and well, definitely, obviously, Compound also has offered a yield farming scheme and Aave hasn’t done that yet, so what do you think accounts for Aave’s success?

Stani Kulechov:

I think there’s a lot of factors involved into it, but I think kind of like we definitely created very good technology, in one way, but also, we were able to attract communities that were underserved, so I think that’s the key component. Back then, I think Maker was pretty much focusing on having ETH as a collateral, maybe a couple of other collaterals, very, very conservative, even though they have this kind of like debt cap, so they can actually list new collaterals but with limited exposure, which is really good in my opinion, and then Compound was also very conservative, I mean, in form of basically what kind of assets there could be listed.

How we came to market this stuff, we started to look like different communities and seeing like what are the active communities and who actually could use our product and also like our currently underserved, so they might have some collaterals that they could use but they cannot use it anywhere else. The thing is that we started to actually look in those and started to list them as a collateral, and one of the interesting part was there is that we adjusted our risk framework in a way that we get less exposure than other protocols that we don’t allow, let’s say, borrowers to get that much out of the collateral, but still, we’re touching upon a market that no one else is serving, at the moment, and that’s how I think was one of the part of success.

Of course, there’s also like a lot of work involved in the technology, the communications, branding, and we participated in a lot of hackathons, like we’re very much developer friendly protocol, so I guess like one time we calculated that like 80% of the liquidity just comes from elsewhere than our user interface like if someone builds a product or protocol and it consumes Aave deposits there, could be yield aggregator, and I think we tried to be very developer friendly, at the same time, and that we have touched a lot of communities in very, very good moment. I think those are key things, and probably other people have more to say because it’s always difficult to assess like what’s the real deal behind the success.

Laura Shin:

Yeah. Yeah, but is interesting I think what you said about the difference in strategies and kind of accessing maybe more of like a long tail interest and you know just, yeah, finding the communities that are enthusiastic. One other thing was, so you know earlier I did ask you to describe Aave, but also, recently, in early December, Aave launched its Version 2, what are the new features?

Stani Kulechov:

Yeah, so Version 2 is like by itself the protocol we made a lot of savings in the gas cost. That’s like one of the things, but I think the main things is that actually we made the protocol more useful for the users. When you’re depositing into Aave, you can actually then swap your deposit, let’s say, from USDC to Dai if Dai gives you more interest rate without actually withdrawing the deposit and going somewhere else and swapping there and coming back. Then, at the same time, you can also swap your collateral, so let’s say that you deposited a collateral, let’s say Ethereum, you borrowed USDC and you maybe converted that to USD, then you went to a Tesla store or online just ordered yourself Tesla and bought that, and now, kind of like you already spent those funds, then you can still, without returning your loan, you can actually swap that collateral to something else. Let’s say you have everything in Ethereum but part of your collateral is in some other asset, you can practically do that as well with the collateral swap, and also, you can repay your loan with the collateral, and that practically means that if you have bought a car and you don’t have those funds anymore, you could actually close the loan with the collateral, and that’s like very much user centric features, but they’re really good because it actually kind of like makes the protocol more useful.

Laura Shin:

Yeah, so basically, if I have a certain type of collateral that I’ve put up and I wanted to keep that collateral because I want exposure to that price movement, but then there’s some other shiny, new token that I want…

Stani Kulechov:

Yeah.

Laura Shin:

Price exposure to, I can switch it easily without having to close out my position in Aave?

Stani Kulechov:

Yeah.

Laura Shin:

Is that it?

Stani Kulechov:

Yeah, and I think like where the cool part comes is that the way the Aave protocol is designed is that you can create new markets, and each market can have different kinds of collateral assets, so at some point in the future, when we can tokenize more real-world assets and other kind of assets, and then you can just swap your exposure for whatever that collateral is, and it becomes more interesting. Let’s say, if you have exposure to real estate in some part of the world and you can swap it, let’s say, from Malaysian real estate to South African real estate, if those will be tokenized, of course, like there’s a long process still on that kind of like frontier. This just shows like how exciting it can be, at some point, and of course, the fact that you’re already able to draw liquidity against those collaterals is fascinating.

Laura Shin:

And so, one other thing is with the debt tokens, so if I have these tokens that represent my debt and then someone holds that but then sells it to someone else and I default, then what happens?

Stani Kulechov:

In terms of debt tokens, so the aTokens are transferrable, so it’s practically a receipt of the deposit, so you could sell you’re aTokens to someone else, and let’s say, you could actually use it as a payment currency, so if you deposited USDC, you get aUSDC and that grows in the balance, and you use it as a payment, whoever you pay, it will still increase, so that’s kind of a very cool payment currency, but the debt tokens itself, so if you think debt, we mean debt tokens, they’re not movable at the moment, and…

Laura Shin:

Oh.

Stani Kulechov:

Very much like…they could be moveable, but we didn’t want to make it moveable yet because we’re still unsure of all of the edge cases and like whether it’s a security concern or not, so we decided that we mint them, maybe there’s some use case that some developer might find in a hackathon, but we just don’t make it moveable yet. We’re still researching whether it’s possible to do that and kind of like trying to research like the edge cases and so forth.

Laura Shin:

Yeah, also, just all the different jurisdictions probably have different rules around what’s a security or what isn’t, and so that could also make things challenging.

Stani Kulechov:

Exactly.

Laura Shin:

So, speaking of security, but in a different way, I wanted to ask also about the safety module, which is a key feature in Aave to keeping the whole system secure. It’s basically kind of like a way for people to stake, and you know I’m sure people who’ve been following the DeFi space know that there have been a number of hacks in DeFi, so can you can describe how the Aave safety module works, how you designed it to help Aave in the event of an attack like that, and you know whether you’ve had to use it in anyway?

Stani Kulechov:

Yeah, so the safety module is part of the whole kind of like Aavenomics, so kind of like how we are letting the community to govern the protocol and also kind of like carry the risk of the protocol, and it took us like roughly six months to design like so called like perfect Aavenomics. I mean, it’s not just a teamwork, we had a lot of feedbacks and everything, and it was a lot of work. In terms of how it essentially works is that the Aave token, it’s a governance token, so the token holders in the community, they’re practically participating governance decisions that are risk-based decisions, so let’s say what kind of asset could be added to Aave protocol, what kind of risk parameters, for example, how much you can borrow against, what could be the incentive in liquidation to the liquidators and so forth, and because you’re kind of adding or taking this kind of risk, you could transfer the risk to the token holders, and the risk to transfer is either passive or active.

The active one is where you take the Aave tokens as a community member and you deposit into the safety module, and that practically means that in the safety module you’re backstopping the protocol in case of any kind of like exploits, it could be a failed liquidation. Something similar happened with Maker on Black Thursday last year when the collaterals decreased in value substantially, and pretty much like 30% of that stake can be slashed if this kind of like shortfall event happens, and of course, like currently the safety module is roughly -I haven’t looked on a daily basis- but last time, when I looked, I think it was last week, there was one point I think $5 billion worth of value there in total, and practically 30% of that is backstopping the protocol. Of course, if that doesn’t cover, there’s this kind of like a passive way of covering the protocol deficit, which is the recovery issuance, and where new Aave’s are minted and this is something similar that Maker, for example, has, so we tried to kind of like pick whatever we saw in DeFi, these different kind of backstop modules, and implement something that is quite innovative.

I would say like backstopping with governance and community members, and let’s say tokens is a very bespoke model. You rarely see something similar in traditional finance, but I guess, somehow, it makes sense. It’s not like full hedging, so I would say like if someone needs additional like, let’s say, risk hedging, they should go for insurance, but the idea of the backstop is that it takes care of the protocol. We haven’t used it yet, but it’s something that was designed to be used if something happens, so it’s practically ready there at any given moment to be used, and the reason we actually wanted to build the Aavenomics this way is that we understood that the most important thing for DeFi and especially to Aave protocol is that we have a healthy protocol and that it’s not in deficit and that way we get more deposits and adoption.

Laura Shin:

Yeah, so speaking of your plans to decentralize governance, that is one of the trickiest processes that any team can undergo, and there’s a lot of discussions about how to do it and what really constitutes decentralized, so how did Aave decide to do it and how do you feel that that process has gone?

Stani Kulechov:

Aave kind of had this progressive decentralization, so when we launch a product, we had keys to the product and what happened is that…there’s two reasons why usually keep as a DeFi protocol, founding team, the admin keys, and one of the things is that if something is found, you need to fix it quickly, and that’s kind of like main thing. The second thing is that you also need to do it very quickly, so if you’re able to fix some sort of an issue within ten minutes or one hour, that is a very important thing compared to, let’s say, if you have a governance process, like full-fledged governance, there’s two days holding period, one day of kind of like a cool down delay, and then you have kind of like a fix, then it might be problematic of securing the protocol.

In our case, like we were definitely like confident on our work, and usually like things are found very early when you launch a protocol. Even after audits, there might be something that might be found in the first weeks or maybe couple of first months, maybe in three, but then you start to kind of like get this general consensus that pretty much the protocol is safe because there’s so many people that has been looking at it, at the code, and for us, like we had to accelerate the governance mainly because the amount in the protocol started to be substantially high, and we never ever expected it to be this high. Like we were joking like when we launched Aave that if this thing goes ever like we will have like $30 million in the protocol, it will be huge, like it will be so cool, you know, and when we just saw it grow and grow, we were like, at the same time, kind of like I would say like nervous that this is like taking off, and like, at the same time, it’s good but at the same time, we started to actually think now we have to actually give the power to the governance and do it as soon as possible. Then, we practically gave the keys and…I mean, since then, it’s been…governance is very new to me in the sense that, you know, usually, internally, you can brainstorm things and maybe ask from the community, but now you have these procedures, you know, it feels like very procedural, you know, and you have to actually campaign. It’s like even if you have a good idea, it might not get executed if people are not active enough to vote or maybe some of the parameters aren’t like what people like, and this is like super new to me, like it’s actually you need to work a lot to campaign. I love governance, but it’s just like it’s another kind of like building block in our workload, at the same time.

Laura Shin:

Yeah. Yeah. No, I can only imagine going from being, you know, not this extreme but almost like a dictator of your own little world…

Stani Kulechov:

Yeah.

Laura Shin:

To suddenly just being one of the players, although, you know, obviously, I’m sure, as the founder and still as the CEO of Aave, the company, you have a lot more sway than the average person. So, what is your vision of a fully decentralized Aave and how far is Aave from that now, like what else do you feel you need to do to achieve that?

Stani Kulechov:

I think, basically, we have quite wide distribution in the sense that like there’s sort of token holders, but I see two problems. One problem is that even though we have wide base of holders, our governance is too much relying upon the team and kind of like not just the team doing the work but also kind of that the team makes the right things, and it’s a very heavy, heavy load on us, at the same time, but also kind of like it’s not very contributing to the actual governance. We’re trying to figure out like how we can get wider base to participate because there is participants, but the problem is that they’re active when it’s like a very big topic to vote, and then or it’s something that really concerns them a lot, but like how we can make everyone to participate, not everyone, but a good amount of activity on, let’s say, even smaller votes that makes sense. One of the things which is very problematic is the gas, that people just pay gas to govern, and that’s a problem, and if you have to pay to vote, you know, transaction fees, it’s not that incentivizing, and that’s one of the things why what is kind of like a bottleneck there, so we kind of like from the voting perspective, we want to have more addresses voting, and of course, we want to have more addresses delegating to other addresses and having this kind of like a protocol politician, so this is the one thing, and this problem is a bit common widespread in DeFi.

Another problem Aave has in governance is that our governance is a bit a different than others because in Aave governance, you can actually delegate voting power just  to kind of protocol politicians and also separately, the proposition power to someone to put a proposal on-chain so that if it gets voted in, it will automatically execute, and you can delegate that power to put proposals on-chain to someone more technical, kind of like a lawmaker-codemakers. What we are trying now to do is that there will be others that are creating proposals to improve the protocol, and this is something we started to work up more recently. I mean, the Version 2 that our governance allows to actually delegate proposition power went live in December, so it’s fairly new, but we’re trying to achieve kind of like a state where, you know, there’s other teams asking grants from the Aave Dao and also building the protocol so that the Aave actually competes with others, as well, in the form of building the protocol, and that’s something we want to achieve, and it takes quite a lot of time, but it’s kind of like an issue, at the moment, in my opinion.

Laura Shin:

Yeah, this is a really, really interesting part of the discussion. So, in a moment, we’re going to discuss a little bit more about this concept of protocol politicians, but first, a quick word from the sponsors, who make this show possible.

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Laura Shin:

Okay. Great. Back to my conversation with Stani Kulechov. So, you were just talking about what you were calling protocol politicians, how do you define that, and do you see protocol politicians as being a good or bad thing for DeFi and/or decentralized projects, in general?

Stani Kulechov:

Well, I see it kind of being good and bad, but mainly good because it’s very difficult to do bad things in DeFi because kind of like if something is really bad, you know, the good people can always fork, create a new community, and it’s just there is no moats here, and this is something that like once you see happen, you know, it’s actually activates the forked kind of like a protocol, and you know it has to like kind of like to respond to that and you know read the narrative and everything. I think like with the protocol politicians, I think it’s good because you kind of delegate your voting power to someone that has similar values as you have and more time to actually go through the proposals very deeply and maybe there might be a team, actually, and they might have technical people that could actually review the code and what it actually has there. I think that the problem, of course, is that, you know, if you have big holders and they are getting like into coalitions, that’s a problematic thing, but I think forking is the solution in every single problem.

I mean, like we can look back into Linux and see how things work in that sense, but also like one of the issues of the protocol politicians is that there is no incentives, at the moment, so I was actually talking in Clubhouse with Ric Burton, who has been in DeFi space for a few years now, and practically, he was trying kind of like to participate in DeFi governance as a protocol politician style, and it’s just like the incentives aren’t like there, and because like if you want to do like very well being a politician, it’s a full-time job and just being a protocol politician, just for the sake of decentralization might not be sufficient, especially when DeFi and like cryptocurrency is all about incentives. This is like the missing parts, and I think to solve this thing, I think daos need to step up and start to kind of like somehow distribute actively grants, not just grants, but you know stream funds into, let’s say, protocol politicians that get enough support. Then, you have the system that they don’t need to worry about like who pays what and actually, the daos will pay, and they just can focus on campaigning what’s important for their agenda and wherever they get mandate.

Laura Shin:

And so, but you were saying some of the protocol politicians might be technical, but then there might be others that aren’t, they were just advocating for certain changes they want to the protocol, is that how you envision what a protocol politician is?

Stani Kulechov:

Yeah, and the thing is like in politics, as well, we have people who might be also kind of with a legal background and some that are not, and the thing with proposals that are in DeFi is that the proposals are technical, so you can write a nice description of what the proposal is, there is some discussion, but the law is actually the code, so when that goes through the on-chain voting, and it’s important to understand like what the code actually has in terms of like the payload, and it’s good if you understand because if there’s something that actually isn’t correct, then you can actually say, okay, this is a problem in this protocol, but it’s a rare occasion that you put something on-chain that is highly different what you kind of like described in terms. It’s very, would say like a rare case, and that is why you don’t need to be a technical person. I think you shouldn’t be a technical person because this is the part where nontechnical people can contribute and participate, so I think that’s the power of being a protocol politician that you don’t need to be necessarily technical, but it might help, in some cases.

Laura Shin:

Yeah, it would probably help in terms of whether or not you actually do the coding, at least, understanding what’s possible and kind of, yeah, just how different technical considerations might affect decisions that you would want to make. So, this is sort of related, you know, just in terms of the fact that this also kind of bleeds into that legal area, but one thing is you launched that credit delegation product last summer, and it’s interesting because that was what people were calling unsecured loans where they were essentially based on legal agreements, and I was wondering, you know, in the time that you had…so, there was the first version of it, and now with V2 of Aave, you have a different version of it, but I wondered even in V1, how do people tend to use it? Like who were the lenders and borrowers, and then, you know, if they were in different jurisdictions, how did they decide which jurisdiction they would handle any disputes under and stuff like that?

Stani Kulechov:

That’s an interesting question because like how we did the credit delegation Version 1, we practically developed a kind of like a vault where you could just put aTokens there as an Aave depositor, and because the aTokens are there as kind of like a collateral, so whoever you allow to access that vault, they can draw practically to that vault and then to themselves credit from Aave protocol against someone else’s aTokens. What this actually allowed, it allowed the delegators to do or the depositors, actually, is that they have now technical capability just to lend out to someone with their kind of like against their collateral, which is the positive there, so the cool part here is that you deposit into Aave, your interest, you delegate and earn a bit more interest. But the thing is that how it is different than you will do normally is that you will actually just borrow yourself from Aave against your collateral, some other asset, and send it to someone else, and this is kind of like less of a good user experience, but in this relationship what we did actually is that there was one borrower, for example, who wanted to diversify, and they borrowed, and what happened in this relationship, they made an agreement to open law, and open law is just kind of like a DocuSign-type of an application with additional twists. The twist is that you can actually put into the document executions, as well. Let’s say, appoint certain conditions to certain addresses, and then, when the contract is signed, whoever signs as the last one can deploy a contract, so in this open law template, which is very cool, the last person who signs it deploys the vault, and once it’s deployed, then the delegator just funds the vault and then another person draws the credit. In this open law template you could just choose like different jurisdiction, England, this produces resolution clause, arbitration, how many are arbitrators. You could choose choice of law. Let’s say, like basically, English law and then you could…of course, the parties put their names and everything pretty much like the same way as DocuSign works and then, of course, the addresses, who is who and so forth. That was the case, so we created a legal wrapper.

At the same time, we had another kind of interesting credit delegation type is that where depositors were delegating into a smart contract vault that did something in DeFi and could only do one particular function, and that contract didn’t allow the funds to be used to anything else, so there was a yEarn vault called yaLink, which borrowed two credit delegation, imported roughly 15 million worth of USDC from Aave via credit delegation, and there wasn’t any legal wrapper here because everything is on contracts, and obviously, as this vault could only practically deposit into a…I think they were like farming something and then kind of like all the revenue they were paying back to the delegators. Because this is like a closed-loop relationship between smart contracts and there’s no like additional like a credit risk because it’s in the system, that was the second type. There was this one type where you just borrow and handle the reserve with the legal wrapper or just trust someone else or you do the smart contract closed-loop system. Those were the two types of credit delegations.

Laura Shin:

Oh, that’s really interesting. Yeah, what you described with the open law thing is almost like…it’s like some kind of…it’s almost like legal Zoom but specifically for these blockchain contracts. Yeah, it just sounds really interesting. So, I also then wanted to ask, so in Version 1, especially if you were dealing with a specific counterparty rather than doing the smart contract version of using these credit delegation products, that was kind of more of a workaround…

Stani Kulechov:

Yeah.

Laura Shin:

But in V2, you’ve made it more native to the protocol, so how does that work?

Stani Kulechov:

Yeah, so now it’s super easy. So, basically, as a depositor, you deposit assets into the Version 2, and then you just grant a credit line to another address, and that other address just can come and borrow. This is pretty interesting because it’s way easier, and this is something that we’re not…we don’t have a user interface for this yet, but this is something we’re launching in, let’s say, a couple of weeks, and the idea is that practically you can delegate through the user interface to someone else, and also whoever gets the credit line can also manage and repay the credit line through the user interface.

Of course, we don’t have the kind of like…it’s more of a trust-based relationship, so you will not pretty much delegate that way to someone that you just don’t know. It won’t be like sending funds to zero…

Stani Kulechov:

But what’s cool about this is that then the Aave governance, they could actually decide, hey, what if we allow, let’s say, third parties, they could be projects that are working on undercollateralized loans or they might be C-file lending desks or traditional institutions, what if they can create vaults where they can ask credit delegations and that will be in the user interface, so practically, that might be a vault that can accept credit delegations, and depositors out there, it gives certain kind of a premium, and that vault then borrows undercollateralized but does some sort of functionality. It could just borrow to lend out in centralized markets or it could be another protocol that is borrowing in the closed-loop system or it could be just some fintech startup that is having some sort of lending activity, and their sourced liquidity this way to the traditional finance and lend it out further. Practically what it allows actually to do is that, today, we think about DeFi in a way that it actually vacuums liquidity, right, so we’re trying to kind of like get more deposits into the space, more people are using DeFi that way, but one of the things that we’re not working that much is actually how we get the liquidity out of DeFi into traditional finance with the trust networks in different kinds of ways, and credit delegation is just pretty much that. I could imagine some beautiful day very soon where Aave governance could vote that this particular vault could accept trade delegations in a user interface, and it could be some sort of financial institution or a lending service provider.

Laura Shin:

And then, each one maybe would have its own parameters for the type of borrowers that they would allow or something like that, right, like they might have their own way of scoring people’s risks or something?

Stani Kulechov:

Yeah. Yeah, so one interesting, like that could be just like a project that manages, let’s say credit risking and maybe lending activity, and they just take the source to liquidity with the credit delegations, and then they decide, okay, we’re going to give credit based on this, and this, and this particular parameters, and it could happen in traditional finance. So practically, they could do even credit checks, they could do even the normal stuff that is happening, but what’s interesting here is that the person that is getting the credit, whether it’s consumer credit or let’s say B2B credit, let’s say consumer credit, and buys a car, and part of that liquidity or fully could be sourced from Aave and DeFi this way. There is like a trust relationship between this financial institution and the Aave governance that way, there’s like you need to trust it but because they are doing like, let’s say, lending activity, you kind of expect that they do things right, if it’s only based on, let’s say, this kind of like reputation. Then, pretty much, the lending institution that is lending out to their consumers, they do the credit checks, and they have recourse, and so forth.

Laura Shin:

And then, could borrowers kind of build credit by showing their behavior, you know, like this is my main wallet that I use to interact with Aave, and here are all the debts I’ve taken out and paid back or anything like that, like could that also be built on that?

Stani Kulechov:

I think so. I think so. We’ve been talking with DeFi Dad practically because…

Laura Shin:

Travis Blane, for people who don’t know him, he works at Zapper.

Stani Kulechov:

And he’s a super cool guy.

Laura Shin:

Yes, and by the way, he wanted me to ask you who’s your favorite dad in DeFi?

Stani Kulechov:

Well, that’s, of course, DeFi Dad.

Laura Shin:

Okay. I’m glad we got to ask that. I wasn’t planning to, but since it came up. Anyway, go ahead.

Stani Kulechov:

Yeah, and I think like what’s interesting in DeFi Dad besides that he’s like bringing like DeFi to wider option and actually explaining it like to 5-year-olds, and I guess he’s doing it on a daily basis, is that if you could actually have some sort of…you get credit delegations, you repay loans, and end of the day, maybe you hold in your wallet other things, NFTs, and so forth, maybe you actually form this on-chain identity that is so valuable for you and it has provenance, you know, and maybe, that becomes a credit facility, so it becomes this kind of a new reputation.

I think our problem usually is with undercollateralized loans is that we always think that we need to always think how we chase the person all the way to the end that they repay all the debts. Actually, the traditional lending doesn’t work completely like that because, for example, in B2B Lending, companies go bankrupt, and you might not receive most of the funds that you have lent out to a business or to a startup. Many startups fail, so in terms of like private equity that happens, venture capital, and also in many European countries and the US, you have this kind of like possibility to, I don’t know, kind of file for bankruptcy as a person as well or have this kind of like arrangement that you repay part of your debt. We should never kind of think that the recourse has to be like that you have to chase someone, and actually, I studied insolvency law, I mean, like bankruptcy law, and one of the interesting thing is that our economy is more based on this kind of like remorse, so if someone fails, you kind of like try to settle as much as you can, but then that the person gets back into the economy and could be like productive and healthier. This is compared to the old kind of thinking that where debtors should get everything that they invested into. I think if we get this kind of thinking into the on-chain, like identity and undercollateralized loans, then we will start to see more like interest and interesting undercollateralized loans, not the kind of like ways where we go all the way back to traditional finance and try to figure out how we get part of the payment back, but actually, like you have so-called address-based reputation with everything that you have achieved that you don’t want to lose it, but if you lose it once, it’s totally fine, if later you make something good.

Laura Shin:

Yeah. Yeah. It definitely would depend on a really good identity system, though, because otherwise…although, no…okay, I was just going to say that somebody with bad credit could just keep opening up new addresses, but then they would still have to build the good credit and the good behavior with each one. Anyway, all right, so let’s switch gears for a second to talk about the e-money license that you got in the UK, which was granted to the UK business entity that Aave has. I checked out the website, it says that is still being built, so what are you building there, and what do you plan to do with that license?

Stani Kulechov:

Yeah, so one of the things we…our goal was to kind of like get more adoption mainstream, and like it’s just so hard to get direct people to, let’s say, to an exchange and say that go there, you know, buy some ETH, and then go to another exchange and buy some stablecoins. Now, it’s a bit easier, you could just say go to this exchange, get some stablecoins, get some ETH, and then create a MetaMask and do this and that, and then you can deposit, so there’s less steps now, but still too many steps to actually like someone to get like exposure into DeFi. What we want to do is kind of like narrow that gap quite a lot, so practically, that you are able with your traditional currency, so let’s say pounds, dollars, euros, you could convert them into stablecoins and later deposit into DeFi, as well, so kind of like having some sort of like an end-to-end relationship with the users in the sense that, you know, you have the DeFi backend, but then you have the actual frontend where you’re reaching out to the normies, the mainstream. That is what we are trying to achieve, and we’re building it. It’s more of like a site thing that we’re trying to build, and it goes quite slowly, but I think we’re going to launch something quite soon, maybe in two or three years I think will be the most kind of like optimistic plan.

Laura Shin:

Yeah, this is probably the part of your work, like I was saying earlier, that touches more on fintech and is more connected to the traditional banking system, and so it will definitely probably work a bit slower and there’s probably a lot more compliance that you’ll have to deal with. Well, one other thing that I wanted to ask about was Aave had pioneered flash loans, and I wondered how you feel about the fact that 10 of the 16 most prominent attacks in DeFi in the past year have involved flash loans, is there anything you would do differently about that?

Stani Kulechov:

Yeah. Yeah, this is an interesting thing, I actually…I have been thinking that quite a lot, and well, one of the things is that most of the flash loans are used for actually like good purpose, and not just arbitrage but actually refinancing debt, closing loan positions, let’s say, before liquidators can get in and take the borrowers kind of like part of their collateral, so they can kind of pre-liquidate themselves, and there’s Flash Loans used.  Flash Loans are actually used quite heavily in many things. Last year, I think there was $2 billion worth of flash loans from Aave, so that’s like a substantial amount compared to the hacks.

What the hacks kind of like do, like I mean, those hacks are possible to do without flash loans just having the preempt capital. Of course, like if you are a 16-year-old kid or something like that, and you know you figure out flash loans, and that’s the kind of way you can make this kind of like exploit, then, of course, like it does help in a certain extent. What flash loans actually does more for this kind of like security is that it actually bulletproofs the protocols because you can’t deploy anything out there that can’t withstand that kind of an attack because if you can defend a flash loan attack, it means also you could defend a whale that will do similar kind of an attack. So that is my kind of like a key component in terms of like flash loans, and whether kind of like they’re good or bad. They’re actually innovation, they bring something new, and they empower developers, and they empower users, and also, at the same time, they ensure that developers are building good protocols, that they are not getting exploited.  Every flash loan exploit means that the development team just didn’t find something or they cut corners somewhere, and that’s the problem with DeFi, generally, because, you know, DeFi is not equal, you know, there are projects that are putting a lot of effort in security, there are projects that aren’t putting effort in security, and this is kind of like a problem for the space.

Laura Shin:

Yeah, so with V2, you did introduce flash loans to Aave itself, and I wondered what did Aave do to try to protect itself from potential attacks?

Stani Kulechov:

That’s a good question. That’s a good question because I think like pretty much how security is handled is it’s really about reviewing code, thinking of different kinds of scenarios, understanding potential attacks, reentrancy, any kind of like attack that’s related to flash loans, understanding each and every attack like what happened, why, and other potential scenarios, so those are one things. Whenever you introduce new code, you need to think about what are the cases that this particular code could lead to, and then you have a rotation system in your team that like every kind of developer tries to review the other developer’s code, and there’s good procedures on that, so that’s one thing. Then, the second important thing is to have test cases, enough test cases for various different types of behaviors. You should be testing more than you are developing and that applies more into smart contract based development. Then, of course, once everything is ready and you’re confident with your code, then you can actually go to auditors and say, hey, we heard that you are doing very good work, I read your previous work, and we’re very confident that this is something that fits your expertise, and then you take those third-party audits. In Version 2, for example, we have five audits, our fifth audit came recently, and we had formal verification, which is like mathematical proof of how the protocol works and behaves. None of these are guarantees, it’s just like how much you put effort on security, and the more you put, the better, like there isn’t limitation like how much you should or should not put, like you should just put everything because the stakes are high. The example where we thought that there was $30 million will be in Aave protocol and then there’s billions, it just shows how high the stakes are.

Laura Shin:

Yeah, I did an episode with Taylor Monahan and Dan Guido about this, and Taylor was just like people don’t think that just because there’s an audit that everything is safe, you know, she was just like this is not any kind of seal of approval, and yeah, she agreed with you.

Stani Kulechov:

No. Yeah.

Laura Shin:

That, you know, it’s just kind of a continual thing, and I think, I can’t remember if we discussed it in that episode, but you know, obviously, where you have things like new token standards coming out, like what was that hack, was it the IMBTC one where the new ER-777 standard, I think, caused a bug, but like that was a known thing, they just didn’t do anything about it, so yeah, it’s like…

Stani Kulechov:

Yeah.

Laura Shin:

You have to constantly keep up on developments and watch…

Stani Kulechov:

Yes.

Laura Shin:

Them for how they’ll affect your protocol.

Stani Kulechov:

Yes, and that’s a common security thing, I mean, if there is an improvement, you need to update your software.

Laura Shin:

Yeah. Yeah. So, let’s also now talk about Aave’s partnership with RealT, which is a project that tokenizes real estate on Ethereum by creating LLCs for properties and then sending a share of the revenue that each token holder holds to their own Ethereum wallet in stablecoins, which is, I think, super interesting. Aave RealT, tokens can be used as collateral for people to borrow, and so since, at least in the US, RealT tokens are securities, I was wondering how Aave, like what changes you needed to make to accommodate that in a decentralized protocol?

Stani Kulechov:

It’s a good question because it’s a completely different pool. It’s so called like private market with permission to access. Practically, in this case, the RealT, they’re using, the Aave as a technology for the smart contracts, but the market is completely private, so everyone who participates in that market has to go through their own process of KYC and so forth. This is kind of like interesting because, you know, we recently created the feature of practically white listing and black listing addresses, so practically now anyone that has an interesting project in mind, they can just take the Aave code and deploy a market for their own purpose. It’s the same as someone will use MySQL database, but instead of like using like a common MySQL database, they just use for themselves for settlements and so forth, for the settlements sake of transparency and liquidity. Yeah, that’s the only way, in my opinion to approach the kind of like security aspect and also kind of like those assets that are not like purely cryptographic assets. I think we’ll see a couple of other ones coming during this year, and it’s interesting to see and what kind of attention it catches because you kind of lose the permission-less factor where you have this interoperability, and then you’re kind of left with the security of Ethereum and the transparency that the public Ethereum provides, and maybe like fixed settlement systems, so the participants that are going through the compliance and participating in that market, they don’t need rely on agreements that rely on smart contract execution. There are some quite a little benefits on that, and I’m interested like will those benefits by themselves be enough for this kind of projects to take this market further, and I don’t know.

Laura Shin:

Yeah, well, you know, I have to say something that interested me about this project, and in general just listening to some of the other interviews you’ve done, it seems that you and Aave are pretty eager to integrate real-world assets, and frankly, I feel like most crypto and DeFi people view that as kind of a headache to interact with off-chain assets because I feel like it just introduces a whole host of other problems, so why is that something that’s interesting to you?

Stani Kulechov:

Yeah, it is a headache, and the good thing about many of the things that we are kind of like partnering in and talking about, especially like real-world assets, we’re pretty much like technology providers, so we just give the infrastructure and the rest is on whoever is tokenizing those assets and managing, so practically, we have a smaller headache, in one sense, but of course, like if their project succeeds, that’s amazing. Also we tend to forget that most popular assets on Ethereum are real-world assets, which is practically tokenized dollars. This is the interesting part because, you know, usually when we think about real-world assets or tokenizing real-world anything, we think it quite widely, so like how to do it globally, but if we look at like the biggest tokenizations, they’re just one jurisdiction. Practically, let’s say, dollars, what USDC is doing, and they have just one jurisdiction, which is US dollars in that sense, that’s what they do. I think we’ll see more of like projects doing it more locally, so they try to actually solve locally the tokenization, and then, if it works, scaling of it further. It’s kind of like a hope, at least personally, that we will see more value and transfer more value from real-world to the cryptographic ecosystem because in the cryptographic ecosystem, decentralized finance value could move very quickly, developers could build very interesting concept products and efficiencies, and just the transparency itself is very fascinating. Of course, if you solve the transparency in the off-chain, as well as the custodians, and so forth, and the stuff related to that, that’s fantastic, but I just think like having this value net, there’s a lot of potential, and we just are scratching the surface.

Laura Shin:

Yeah. Yeah. No, it will be interesting to see where it goes and how it can affect real-world assets when you bring those features. And so, obviously, right now, Ethereum has been experiencing a state of high fees for loads of different types of transactions for a while, how has Aave been thinking about scaling, are you looking at layer two solutions, are you looking at other blockchains?

Stani Kulechov:

We are. We are quite a lot, but we are also…like we do have a strategy, but we are trying to a bit not to share too much because, at the same time, the layer two is not super important for us. It’s more important for trading facilities, order books, something that has a lot of transactions in that sense. Aave’s kind of like a follower in the sense that, you know, where there’s transactions, there’s liquidity issuance, and then there’s a need for secondary liquidity lending/borrowing market. We are talking to every place, and there’s already like an ecosystem project called Aavegotchi, and they put the Aave tokens into the Matic.

Laura Shin:

Yeah.

Stani Kulechov:

And that was just one example, and there’s other kind of like pulse in the community that just want to port them, and it’s already like a good start so that we’ll see that it’s more of a community initiative to get like layer two experimentations. We’re still kind of like looking at it, but we definitely have an interesting solution, at some point, when we are ready, and that might come quite soon even. I mean, it’s really depends on how serious the L2s will become.

Laura Shin:

Oh, and so also, would you consider leaving Ethereum or trying a different blockchain?

Stani Kulechov:

Well, kind of how I was born and raised in Ethereum, and in terms of like we’ve been always building here. would say that like that’s our like on-chain headquarters, so like…and that sounds like…it’s very difficult to leave because the culture is here, the ecosystem is here, the composability is here, but there are some cool things happening in other places. I’ve been following what’s happening at Polkadot, I’ve been following also like Layer 2s, and just keep like curiosity always. I don’t think people will copy what Ethereum has, but what I’m interested to see like these new cultures evolve in like other blockchains and seeing like which direction it takes, and maybe if Aave has a place there. Aave’s more about not thinking about DeFi, but like building culture and being part of everything that is on the on-chain. We want to empower. Like finance is a big space, but it’s just a space that empowers other economies and cultures, so we want to empower what’s happening in the creator community, the E-commerce community on-chain, and be involved in various parts, and that’s why we focus more on culture with the branding and everything, and that’s why I’m following like what’s happening in other blockchains, as well. I will not say we would ever leave Ethereum. I hope not. I mean, this is like super cool to be here with so many…I mean, the community is very healthy, so yeah.

Laura Shin:

Yeah. Yeah. I feel like I ask this question of a lot of people, and I get a kind of similar answer, I think, you know, they’re kind of seeing where things go, but people do, I think, seem to have some kind of loyalty to Ethereum and recognize that that’s where a lot of the activity is.

Stani Kulechov:

Yeah.

Laura Shin:

And where you can get network effects. So, earlier, we did talk about kind of the difference between Aave, which, you know, doesn’t have kind of the traditional Silicon Valley venture capital backing, I mean, you do have some investment, but you know it’s just a little bit of a different beginning that you’ve had. If we even just look in general, you know, obviously, DeFi and decentralized projects, in general, are really different from traditional startups, so in this open-source world, you know, which is quite different from what it would be like, in a traditional startup, what can a DeFi project do to build a moat?

Stani Kulechov:

I think nothing because it’s impossible to build a moat. we tried. I think what’s interesting in DeFi, especially compared to traditional finance and other businesses, is that there is nothing that actually protects anything because, you know, the code base is open-source and the idea is that anyone can contribute, anyone can just take that code, improve it, and create something else, and then you can look at that and create something more better, and the liquidity also works the same way, if someone creates a better algorithm, the liquidity just moves there, and also better user experience. There isn’t that much of a thing that is protecting. What’s cool about it is that the innovations, speed of innovation, is very, very quick, which makes this space very attractive and very promising, at the same time, so I think like as a DeFi project or a newcomers. I think what’s important is actually like how much you can keep up with the rate of innovation, so it actually doesn’t matter like what’s the product currently you’re working upon but how you vision to improve it and what you might be doing after that product, and what are the next kind of things. It always kind of like to some extent, in my thinking, it always boils down to the team, like how open kind of like an environment they have to be creative. If the team, if the founders, and if they can be openly brainstorming and kind of like come up with ideas fairly usually like there is constant innovation, and we see this in DeFi happening, like protocols are innovating like constantly, even though we’re kind of competing as crazy here, but at the same time, like it’s stressful, but as you get used to the idea that everyone is just like coming out with cool stuff and you’re expected to come up with some cool stuff and people like that, then you kind of like get into the mode.

Laura Shin:

And do you feel that the community can sometimes make it like…you know, earlier when we were talking about the difference between just being able to implement changes that you want and now having to go through this process, does that make it harder to keep up with the pace of innovation?

Stani Kulechov:

Yeah, it does. There’s elements kind of like, you kind of miss a bit of surprise element in one way, so you have to discuss it quite openly on what you’re building, what you’re going to implement. Otherwise, if it comes out of the pushes and there’s going to be a proposal vote, you have very little time to actually educate everyone what’s going on and campaign on the improvements. Then, of course, there’s the procedure that you have to do. But at the same time, it adds stability, it adds stability and it adds certainty. The certainty is very important, so even though like protocols have to innovate, they have to be very secure at the same time, and changes have to be applied in a not light kind of like wide manner. So in one way it slows down, but it brings a lot of value by having more stability in the protocol, and yeah, those things are kind of involved.

Laura Shin:

All right, well, what’s next for Aave?

Stani Kulechov:

Next for Aave, I think…yeah, we’re deploying new markets, so that’s an amazing thing because we’ve been like promising to deploy new markets for a long time, and you know we actually found a community developer that is working on deploying them, so the next market we are deploying is actually this kind of like an AMM market where you can use not just Uniswap liquidity provider shares as a collateral but also SushiSwap shares, and Balancer shares, and also Kyber, as they’re coming up with their AMM, so automated market maker, kind of like where you can trade like Uniswap, and what’s interesting here is…

Laura Shin:

Like your LP tokens from each of those?

Stani Kulechov:

Yes. Yes, exactly, so you can use them as a collateral and get liquidity more. What’s interesting here is the governance, so we decided because our governance modules is quite unique and allows this kind of like voting strategies and have like inclusivity on multiple tokens. We decided that we actually are going to govern that market in a way that the Aave tokens has some voting powers, as well, but also we gave voting power to Uni, BAL, KNC, and Sushi tokens. Practically it makes kind of like inclusive governance, so even though it’s an Aave product, we’re not the only ones governing because it relates in one ways to the other protocols. I think this is the next thing coming up in DeFi that, you know, you have projects building together things, governing things together, and this is where you will see like a lot of interesting stuff.

Laura Shin:

Yeah, it does sound really interesting. All right, well, we’ll have to have you back when that happens. Where can people learn more about you and Aave?

Stani Kulechov:

I think following us on Twitter, so @AaveAave is our handle. We’re quite active in Telegram, and of course, Discord, and I’m actually frequently now in Clubhouse. I’m just listening and sometimes talking there, and you know it’s a nice place to chat about things. If someone wants to look what our markets looks like, it’s aave.com, and yeah, and if there’s something…I mean, the team is very reachable, I’m quite active everywhere, try to be as close to the community as I can.

Laura Shin:

Okay, great. Well, thank you so much for coming on Unchained.

Stani Kulechov:

Thank you, Laura, for having me here, it was a pleasure.

Laura Shin:

Thanks so much for joining us today. To learn more about Stani and Aave, check out the show notes for this episode. Don’t forget you can now watch video recordings of the shows on the Unchained YouTube channel. Go to youtube.com/c/unchainedpodcast and subscribe today.

Unchained is produced by me, Laura Shin, with help from Anthony Yoon, Daniel Nuss, Dan Edlebeck, Shashank, and the team at CLK Transcription. Thanks for listening.