Aave entered the top 10 most popular DeFi platforms
Blocked funds in Aave protocol exceeded $ 396 million
DeFi adoption will continue into 2021
International consortium of news organizations developing transparency standards.
The Aave platform is currently among the top 5 most popular DeFi projects, and the value of its own Aave token has increased 30 times. Millions of users from all over the world have already joined the project, and the number of blocked funds exceeded $ 936 million. How a startup managed to become a profitable business in a year and what the DeFi market will face towards an open, efficient and … More in the future, BeInCrypto discussed with Aave CEO Stan Kulechov.
– The Aave project has transformed from a startup into a successful project in a short period of time. How was the project created? What problems were associated with the development of the project?
S.K .: Aave was founded in 2017 and was originally called ETHLend. ETHLend was the first lending platform on Ethereum in the P2P segment, that is, transactions were concluded directly between lenders and borrowers. For example, if you want to take out a loan, you first need to find a person who is willing to contribute this amount. On the other hand, the depositor needs someone to take advantage of his liquidity, then he can earn interest. We rebranded to Aave when we switched to a lending pool model so that borrowers can now borrow from the existing liquidity pool at any time and depositors can start earning interest as soon as they deposit into the pool. It is much more efficient than ETHLend, since you do not need to wait for your deposit or loan to find a pair.
Why has DeFi become so popular this year? What was the impetus for the development of the industry?
S.K .: The current 2020 has certainly been the year of DeFi. We are seeing an explosion of new projects and financial instruments, which is really great. I think this is partly due to the compositional nature of DeFi, which allows developers to create these “money Lego” by building new features on top of existing projects and creating new additional tools. This means that the community can innovate at lightning speed, and new products are always helping the ecosystem grow. Also, the UI / UX in general in DeFi has really improved in recent years, so these products are now much more user-friendly than they used to be, and I think this is becoming a major driver of growth..
– In one of the interviews, representatives of your company stated that the initial cost of the Aave token is zero. But Now Token As the use of cryptocurrencies increases, new types of tokens are emerging. They can represent value or something intangible like voices. Two … More is trading at $ 36.15. What is the reason for the rise in token prices and what is your forecast for the end of the year?
S.K.: The initial price of the AAVE token was zero because it was an exchange token with an existing LEND token. All LEND holders can exchange their existing LEND for AAVE at a rate of 100 LEND for 1 AAVE.
– How do you assess the DeFi market today? How Viable Are DeFi Projects? And will the DeFi sector repeat the fate of the ICO?
S.K .: One of the most common metrics for evaluating the DeFi market is total value locked, which is the total value of assets locked in various DeFi protocols. Today, according to Defipulse, that’s about $ 11 billion, a huge increase from $ 691.6 million in January. There is more liquidity circulating in DeFi now, which illustrates the growth of the market.
DeFi projects bring new use cases and new opportunities to make your money work. Aave makes it easier than ever for new users to enter the DeFi sector. Users can purchase cryptocurrency directly from the DApp using their credit card or bank transfer and then start using the Aave protocol immediately. Every day, the user interface is becoming more intuitive and accessible, and DeFi is getting closer to mass production. Many DeFi protocols are integrated into wallets such as Argent or My Ether Wallet, so you can earn interest on your coins without taking them out of your wallet. Things like that really make the end user experience a lot better than even last year..
– How will the DeFi sector develop in 2021? What will be the main trends in the market? Do you agree with the opinion that agriculture will play a key role in DeFi?
S.K .: I think that in 2021 DeFi will go mainstream. We are seeing an upward trend in financial institutions and the fintech world. The simpler and clearer the user interface becomes, the more new users come. Profitable farming is on the rise this year, although this is not the most sustainable development option in the long term. At Aave we do “safe mining” where holders can put their AAVE to add an extra layer of security. In exchange for the risks, stakers receive incentives in the form of AAVE tokens and possibly a percentage of commission fees (if management votes to do so). This mechanism rewards people for taking risks to keep the protocol safe..
The Future of DeFi in 2021 & Beyond | Global DeFi Summit
– What are the risks associated with DeFi projects? How to minimize them?
S.K .: When creating complex financial instruments, there is always a risk of a smart contract failure, code errors, etc. This means that it is very important to conduct a thorough audit and take security very seriously! DeFi protocols should not sacrifice the security of their users’ funds to get a product out faster. It’s much more important to take your time and make sure you’re doing it right..
– Since the beginning of the year, hackers have broken into about 10 DeFi protocols. What users should do to protect their money?
S.K .: This is why audit and security are so important! At Aave, we take safety very seriously and have done several checks. I am a supporter of self-regulation for DeFi, which is why at Aave we set and maintain high security standards. However, if users want additional protection, they can always insure themselves against smart contract failure using something like the Nexus Mutual. It is also important that people research the topic on their own before investing in DeFi protocols. Find out if the code passed validation and what security measures are implemented in the protocol.
– If we talk about Russia, then to what extent DeFi may be of interest to Russians?
S.K .: The advantage of DeFi is that they are limitless! DeFi is definitely interesting for Russians who want to maximize their passive income by earning interest on their cryptocurrency, or take a loan without going through the formalities established in a traditional bank.
– Do you know good DeFi projects from Russia? If so, which ones could you name?
S.K .: It is actually quite difficult to answer this question, as most DeFi projects currently do not have a fixed office. For example, Zerion and 1inch have founders from Russia, but like many DeFi projects, their teams are also “decentralized” around the world..
– Thanks for the conversation!
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