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

Unchained

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)