Stablecoin adoption could lead to DeFi growth, says Aave founder

Share This Post

Stani Kulechov said that one of the challenges in the ecosystem is that there’s less backing in decentralized stablecoins compared to centralized ones.

Stani Kulechov, the founder of the decentralized finance (DeFi) protocol Aave, highlighted several issues within the DeFi space at the StarkWare Sessions 2023, held at The Cameri Theatre in Tel Aviv, Israel. 

In a fireside chat titled “DeFi: Resilience in the Face of Global Uncertainty,” Kulechov and Cointelegraph’s managing editor Alex Cohen discussed various topics, including DeFi’s risks compared to traditional finance (TradFi) and how stablecoins can lead to more DeFi adoption.

Fireside chat with Aave founder Stani Kulechov and Cointelegraph managing editor Alex Cohen at the StarkWare Sessions 2023

According to Kulechov, the preciseness of quantifying risks in DeFi is better than TradFi products, which could push further space adoption. The Aave founder explained that operating in DeFi would become cheaper than TradFi as the risks are identified more easily. He said: 

“You have all this visibility, you can actually quantify the risk more precisely which should mean that then you’re operating in an environment where it should be cheaper for you because the risks are more known.”

When asked about onboarding regular people who may not be as “tech-savvy” into the DeFi space, Kulechov noted that stablecoins and payments could play an important role. According to the Aave executive, building the “payment layer,” which involves stablecoins, can potentially hook regular people into the space, eventually introducing them into DeFi.

“It’s more about building that payment layer, and then the whole DeFi loop starts to close because you have a way to exchange value easily,” he said. In addition, Kulechov also noted that pushing the innovation curve further can break more adoption.

However, the Aave executive also recognized several issues within the stablecoins space, including the value within the ecosystem and the collateralization of decentralized stablecoins. Kulechov explained that:

“The current issue is that there is not enough value in the ecosystem that you just have less backing in decentralized stablecoins compared with centralized. And, I think that’s where we have kind of like a big problem at the moment.”

The Aave founder added that the stablecoins, which he described as the “most resilient ones,” are overcollateralized.

Related: DeFi enjoys prolific start to 2023: DappRadar report

When asked about DeFi becoming more of a buzzword in the near future, the Aave protocol founder expressed confidence in the space being around for a long time. He said:

“DeFi will be around for quite a long time because it solves one of the first problems that blockchain has been solving. And, it’s an infrastructure that’s going to be used in many applications.”

The founder highlighted that there are many new innovations in the space, even finding their way into non-financial applications.

Read Entire Article
spot_img

Related Posts

The Bulls Are Back: Spot Bitcoin Inflows Surge With New Records

Bitcoin bulls look to be firmly back in the driver’s seat following weeks of seeing BTC suffer a bearish sentiment with its price dips The current bullish outlook for the flagship crypto is evident

Bitcoin and gold surge in Q1 2024, showcasing strong investor correlation

Quick Take Bitcoin, frequently dubbed “digital gold” and traditional gold, showcased impressive performance throughout Q1 2024 Bitcoin has surged over 60%, trading above $70,000 and

Atlas Navi’s Drive2Earn 2.0 offers big discounts on petrol prices

Bucharest, Romania, 28 March 2024: Atlas Navi, a trailblazer in AI-powered navigation, has unveiled Drive2Earn 20 — enhancing rewards for drivers as it sets its sights on overtaking Tesla as a

Dogecoin Soars 17% To Break $0.21 As Volume Explodes

Dogecoin has jumped 17% in the past 24 hours to break past the $021 barrier as on-chain data shows a significant increase in volume for the memecoin Dogecoin Beats Market With 17% Rally In The Last

Solana’s Future Clouded By Coinbase-SEC Ruling, Says Crypto Lawyer

On Wednesday, the future of Solana may have been clouded by United States Southern District of New York’s Judge Katherine Polk Failla with her decision against Coinbase’s motion to

Ethereum L2s face bottlenecks as ‘BlobScriptions’ drive fees up by over 10,000%

Ethereum’s blobs transaction fees witnessed an unprecedented surge yesterday with the debut of “BlobScriptions” Blobs represent a novel transaction type that alleviates layer-2 fees
- Advertisement -spot_img