👉 News. The Aave protocol, a leader in decentralized savings and loans, was one of the stars of EthCC.
👉 Background. DeFi is taking advantage of recent scandals in centralized 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 the EthCC?
The Ethereum community keeps growing, it's quite impressive. What I like about the EthCC is that the participants are focused on applications, their development, we talk about projects and very little about markets. This conference allows us to talk about the real challenges that the community is facing. I participated in several very good debates over these three days, and I saw the keynote of Vitalik Buterin, who gave his personal vision of things and how he sees Ethereum in the long term.
Precisely, how do you welcome The Merge and the development of Layer 2 (second layers)? The Ethereum ecosystem seems to be boiling...
Subscribe for free to read more.
Everything that's happening right now is very positive. As Vitalik said, Layer 2 solutions have matured and it's a sector where we see a lot of innovation. Some experiments on Layer 2 are now implemented on Layer 1. From now on, it is not necessarily the main chain that is responsible for innovation. For example, we are currently working on projects with StarkNet or with Polygon, which we already use, and which allows us to reach a larger number of users thanks to lower transaction costs.
The recent scandals with Celsius and other lending platforms have shown the limits of "CeFi", i.e. centralized finance. Has decentralized finance won?
What happened in the last few weeks is quite simple: platforms borrowed crazy amounts of money from each other. It 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 part of our DNA. From the beginning, we've been focused on innovation, constantly looking for ways to improve the applications. We are also a very open community. After Ethereum, we worked with Polygon, Avalanche, and others, integrating new services each time.
You got an e-money license in 2020. What for?
With this license, we want to bring decentralized finance closer to traditional finance, and thus reach a new audience. There are two ways to evangelize the planet. Either you let people come to you, but that can take time, or you go to them, and that's what we are doing. We are working on consumer DeFi services. The goal is that any user can deposit funds on a DeFi protocol.
Can we imagine a general public application of Aave?
Adoption is an obsession for us. It's the key, so we're working on simplifying the products. After that, we have to be lucid, there is still a long way to go.
So DeFi will have to wait a long time before replacing the banks?
Yes it will take time, because banks have a lot of customers and rather efficient interfaces. But decentralized finance is much more efficient and transparent, so gradually the traditional players will get into it. I'm sure that DeFi will become the heart of finance and banks will become a gateway to it.
You have very recently announced a stablecoin project. How is it better than the others?
The problem with over-collateralized stablecoins is that you don't earn anything 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 loaned to other users, ed. note). You will be able to use your entire available portfolio to issue stablecoins.
You have launched Lens Protocol, which allows you to create decentralized social networks. Why is this essential?
As for the currency, I think it is essential that we are sovereign over our data and our digital identity. Today, banks own the financial infrastructure and giants like Facebook own the social infrastructure. Today you can't do without these infrastructures. The goal 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?
What could you say to a banker who doesn't understand DeFi?
In DeFi, you own your money and you don't have to go through a third party, like a... banker. Obviously for a banker, it's complicated to understand! (laughs) And then you can choose your services, take out a loan with such-and-such, do an operation with another, without going through a centralized player.
What do you think of Morpho?
Protocols like Morpho are a great thing for Aave, because they bring more people into DeFi.