Fireside With Aave's Stani Kulechov and Sky's Rune Christensen l KBW2024

[Music] all right all right it's happening looking good so um why is defi so important well fundamentally defi is about taking the really really basic use case of the financial system which is I mean really it's like probably the biggest and most important human construct in the world right it's running everything and taking it from being only available to a very select few Elite Ultra rich and bringing it to the whole world right in everything that's possible right you can do that with defi because defi is about introducing decentralization to finance and with decentralization you get transparency you get verifiability you get fairness um and well an efficiency the highest level of of the the kind of services of the efficiency you make that available to everyone and then really crucially um with defi you introduce permissionless composability to financial systems and to financial use cases and what we like to call Primitives so in defi it's C of like every protocol is kind of specializes in in yeah this thing we call the D5 primitive um which is kind of like a very one specific Financial use case so um yeah I'm run I'm the co-founder of sky sky used to be called maker until a week ago um and it is the oldest and largest and most profitable decentralized stable coin project in the world uh recently rebranded and upgraded to Sky for the purpose of basically making all of these benefits more accessible and more widespread in the world I think uh what is happening here um and has been happening for years now is is that um um at least like from us we we realized how um impactful the technology here is um so we the Builders of of def5 obviously when building this technology over the years we we realize actually how much connectivity there is uh with people so essentially um I mean when I was starting to build a I was super excited when when essentially um skyware maker uh back in the days was um creating stability on ethereum and back in those days in itan days we we didn't even have stability so we were focusing on lending borrowing as a kind of like a idea of democratizing finance and making Financial opportunities uh possible for everyone regardless of um your backgrounds regardless of your financial situation and and just creating this uh idea of um what if you can have borderless credit markets where effectively all value could actually be stored and to simplify it um Finance doesn't need restrictions it should be essentially available to everyone and these Financial opportunities and it should be transparent and essentially that's what makes defi really important um for me specifically because I think that those opportunities will will actually create the biggest uh empowerment and we still I mean me and run we come from um we come from the nordics we come from Europe and um it's really harder to build in some ways um de as Finance because the banking system is so embedded into the existing um economy and and that type of ecosystem um but here why we are here for example today is is that we see that this Tech can be adopted much more more faster here and bringing a lot of uh opportunities and uh empowerment Define in some ways is arbitrage it's Arbitrage between what's old and what's new who are the first people there and who are able to capture those incentives and and be uh the Builders of the future and I think that's what uh we're doing here today with with run yeah and um I think what's really interesting to point out is how uniquely Well Suited the two protocols that we represent are for this uh the composability of Diva right because in in guy formerly known as maker uh largest most profitable decentralized stable coin uh the focus really is savings right it's a place to sort of for for for people to store their assets and get savings and get rewards and with AA it is lending and borrowing which is sort of like taking taking your assets and then doing something a little bit more advanced generating uh some unique value by kind of opening up the opportunities of what you can do with your assets right and um like I said composability um the fact that you can directly connect these protocols together is so essential really to to why def5 is so exciting I mean it's only possible because of the other things decentralization transparency and so on but but I think at this stage we still just scratch the surface of all the opportunities and all the the just the amazing value that can be created when we really let people's creativity run loose and we let the opportunities of many different D5 protocols be realized by putting them together building really interesting products um what's really needed to get to this next stage I think is more collaboration right more um like a break from the old in crypto which uh I think I mean for the last couple years since crypto got really big it's very much felt like a wild west it's like crypto got really really huge there were suddenly tons of money in the space and it's like everything is sort of um sometimes I think it can feel a little serome you got you know coins being pumped uh all sorts of of stuff that uh I I feel like us from the more established more mature D5 protocols we don't necessarily want to be associated with with many of the other things that are happening uh in the broader crypto space um just because I mean the nature of of crypto does lend itself to yeah a lot of very um fast and loose things happening in the space right but the reality is that in the defi industry specifically things have really like reached a new level I think especially in like the last year and and I think it's really now being um encapsulated by like the recent Evolutions uh and rebrands and kind of uh taking things to the next level that you're seeing in sky in AA in some of the the other D5 protocols uh everyone's beginning to focus on the really long term like we're seeing like multi-year plans for the future um and and just generally I think like uh like a greater level of professionalism and this is so important right like it's it's really really crucial to have more maturity and more collaboration in defi uh between the different projects because I mean the whole world needs to benefit from this stuff we need to break beyond the bubble of crypto and then Crypt Bros and uh yeah I mean great conferences like this one kind of I think is actually getting quite beyond the the usual crowd well that's because we're in South Korea so this is like this a unique country where that's very proactive with very smart people that that understand the the potential of Technology um but by D5 projects getting together and promoting and educating the sector and the industry in crypto defi as a whole rather than individual projects I think it's going to be a lot more straightforward to teach people the benefits of this stuff so you're not shooting for the hip and and every project sort of trying to pump their own coin or or promoting themselves only and and and going forward in this sort of zero sum give me a bigger slice of the pie but instead the space needs to come together and grow the pie for everyone and yeah I think sky and a are really well positioned to to push this forward uniquely and I think that's um really good statement statement uh Ru because essentially like defi has grow quite significantly um already uh within our space um just a good quick question how many of you're using some have ever used defi at the moment out of uh can't really see but oh there's there's there's good amount so there is adoption but it's still um not as accessible that it could be so what we are trying to achieve is that we want to build more accessibility we want to build defi that is very easy to use um it might seem like a complex technology it might see seem to be a lot of interesting technological improvements to like more like centralized traditional Finance um but end of the day it's just building better faster stronger finance that just creates better opportunities and the beautiful thing about defi is that actually it is technically available to everyone but we need to cross the Gap actually building those uh experiences and that's what we are trying to do for example at at a um and behind of this uh experience and and and the future obviously there's the technology that is really resilient maker and now sky has been live for years at the moment same for a so the technology has worked and and there's examples of more like centralized um um Alternatives that aren't anymore here because they don't have that resiliency backed in and the resiliency comes not just for the technology but there is a large group of people that are actually contributing in both of these Dows um so the sky Dow and the AA Dow um there are people that actually care about um what kind of um uh specifications and parameters and changes be made in these um two protocols and and that affects why uh open systems transparent system result in a better outcomes and then as the backbone works we want to focus now on the actually getting this to everyone and getting these opportunities to everyone and and it's it's it's we see stable coins hitting alltime high at the moment um so there's a lot of utilization but we're still small and if we partner together with sky and a and join um forces what what happens actually we we have bigger pie uh to grow so um we can actually go to the uh next uh interesting topic and and we have a really exciting announcement uh to make with uh with run as well so run do you want to uh break out the uh the news yeah so now is the time to pay attention everyone so they drop well okay let me let me just preface it very quick right so sky is the largest decentralized stable coin focused on savings Ary is the largest lending and borrowing Market focused on what you can do with those savings I guess you can say um and I think a lot of people would look at these projects and ask why aren't they collaborating more closely and it's sort of I mean like why right it's the answer is something I I would say it's something like it's the wild west of crypto and it's time to take that to the next level right move beyond the wild west get us to the future of defi of shared benefits of collaboration um and we just saw I mean within the last couple of days basically uh pretty much um from the moment that uh the big Rebrand and upgrade to Sky happened with maker there was this major initiative from both the sky and the Ava communities using the decentralized governance processes as stany just mentioned um this is how this is how decentralized D5 protocols they work ultimately based on the community itself making proposals um and there are some really really major interesting exciting proposals of how to very tightly integrate these two protocols and really like see how far can we go when you when you decide all right defi should be about really doubling down on composability on interoperability um and we want to I mean I guess me me and stani as individuals as as contributors to these systems to put a name to this renewed effort of collaboration and integration between the two protocols uh and we call it the sky a force yeah so so oh yeah love it so Sky a force symbolizes all of these proposals coming together from the centralized governance of the two protocols to most importantly integrate the usds stable coin which is the new stable coin coming with sky as it's upgraded from maker um the upgraded version of D usds to be integrated into the AR market and on top of that adding some really really exciting incentives and basically using the economic power of both protocols to just make the most easy to use I mean I would say Nob brainer the the place to go uh to really get the value of dii without having to be some sort of Super Genius but rather that this is something everyone can access um and there's a whole bunch of other stuff uh because both of these Protocols are so vast there's so many interesting opportunities where they can interface and collaborate and work together and Sky a force is about really pushing that to its limit in order to set an example for the entire Diva industry right because it's not just about sky and AA it's about the whole industry which really it's it comprises numerous of these major mature proven projects um but by Sky and AR specifically coming together and tightly integrating with each other um I really think that's I mean that's something that just it needs to happen if the whole space is going to level up to the next level and we can begin showing a united front so we can educate everybody about the benefits of defi as a category uh instead of just focusing on individual projects and trying to sort of go for the short-term payoff for ourselves but rather focus on how can this benefit everyone and I mean it's it's something that's very interesting we've collaborated in the past uh maybe once Rune um with the um theam module so so the way um Sky works is that um they have these uh abilities to actually um mint the stable coin into external markets like a and then users can come to a and and and borrow um the stable coin and part of this initiative so there's going to be obviously the main important thing is to um get the um usds and stake usds into a so that can be actually uh used as an asset and borrowed as as simple as that so we want to keep it super simple um and we want to actually see people using it at at that simplicity so essentially the savings product um borrowing lending um and and just improving the user experience in in the upcoming uh months and and and so forth and and second thing obviously is that going back to this d3m module um there's going to be also a um integration into um the a markets so a has actually multiple markets where you can actually uh Supply different types of assets and and borrow um stable coins uh as an example and and why there's different markets is because every Market is tuned into different type of uh risk profiling so the d3m actually will uh Supply assets into um the main Market uh where the usds is also um listed but but at the same time into the Lio Market which is specific Market that is created for a particular use case and we will see multiple individual separated markets in in the future as well um and obviously part of this initiative there's going to be a completely new uh market and that's going to be the um a spark market so spark is is essentially um a a a landing Market that is part of the sky kind of a star um constellation and it uses the a technology itself so now with this new market actually it's it's going to be synergic uh collaboration where also the profits of the markets are shared between the sky and uh the avaal so in some ways it's it's kind of a joint venture type of a thing but between and that's really cool about that um but essentially um these initiatives are tying these two DS together more closely to work and those who know a little bit about Dows it's extremely difficult to sometimes work and and make progress um it's some ways I can um say that this is a a big actually step for both the avaal and and the sky um achieving and going to the same uh Direction because all we want actually is is people to start using this technology and start using these great products and what sky essentially is going to be about in the future is accessible savings anywhere uh to anyone and and that access is guaranteed uh by the smart contract by the technology that everyone is uh here today and it's resilient the point is the resiliency of these uh Network networks and and and and protocols and with a being able to use whatever value you have on chain uh and being able to borrow against that value uh or just earning uh of your value that you have on chain so keeping it very simple and hopefully um at some point when we come back here uh in into uh Soul we we see actually this technology being adopted uh widely um that's kind of like our uh Vision here yeah with the sky AA Force you as a user will be able to get the best the simplest use case of def5 which is ultimately the savings I mean putting in putting your money into the D5 protocols or borrowing getting access to liquidity from the D5 protocols and you'll be able to use usds and borrow usds on a and with the incentives and with the rewards provided from from both protocols working together unlocking the opportunities of defi collaboration and composability made as easy as as possible to use for the end user so we can go out there and we can start really promoting the benefits of defi to everyone and obviously there's also incentives um and don't forget the incentives yeah that's why we are here um but essentially the um spark a market um has a double incentivization from the um spark and uh the sky ecosystem and also the um a dow ecosystem so it's going to be super exciting and um we're we're really happy that we're able to do this and be here together um and work for work on this uh together as well um I hope you all had a fun attending this talk and and um hope you all become um defi P more or less at some point word all right thank you thank [Applause] you nice thank you guys May the force be with you