ETHGlobal Lisbon Fireside chat with Stani Kulechov

foreign [Music] we want to do a quick conversation about how this ecosystem has evolved and specifically a lot of themes that we've seen the last few years want to reflect on that and understand kind of how things are moving ahead and what I want to specifically talk about is how D5 has changed and what we've learned in the last few years and what we're excited about in the future and for this I want to bring on stani who's co-founder of Ave and lens to share a few of his insights over the last few years so without further Ado please join me in welcoming stani on stage all right GM BD well stani I am super excited to welcome you here because you've almost been to every single League Global hackathon ever and that's one amazing because you've been part of this whole ecosystem from its initial foundings not just the global just ethereum itself and what I want to spend the next 10 15 minutes on is talking about how things have changed we'll start all the way at the beginning how did you get the idea of Ave and how was Avi started or Ethan as I Used to Know It yeah um being quite quite a long journey and it's actually very fascinating to be here now um after a few years and seeing the community grow these hackathons used to be very small it was just basically me and Karthik I remember a few years ago we did the world's biggest ethereum event as a hackathon and it was only 400 people yeah so it's it's grown quite substantially so it's uh um super exciting to see like how ethereum or even like Beyond Webster Community has been growing specifically the uh developer Community um and in very early what what was fascinating for me is is that um if you think about blockchain and what we're trying to solve you know it's I personally tried to solve um kind of like a smaller challenge of being able to use a crypto asset as a collateral to unlock liquidity um as a use case but what I noticed um what what got my interest is that blockchain and web tree is something where you can solve challenges globally so you solve something for someone but it can be applied to everyone it's it's basically a way to create uh Democrat Democratic software borderless that doesn't take into account the background so you can create like a very neutral software that can help people across globally and that was something very appealing to me and I think crypto in general had this kind of like uh perception as well and got me in the first place to build something interesting and finance uh I've I've been always a finance geek and seeing programmable smart contracts was was something that got me excited to to actually build the very predecessor eat land before Army what was D5 like five years ago well back then it's there wasn't the FI so um you know there was one decent Choice exchange um and the kind of like idea of you know what if you could actually trade um against smart contracts and they have specific rules um and and you can let create orders without giving custody of your funds um you can talk about either Delta in case uh somebody remembers yeah there was probably third old time and something else kyber um radar relay radar relay we met someone from radar relay today which was uh very strange because um you know it's a there's a lot of projects and people in the space even these projects um you know they they change and evolve um but you see uh people staying in the space which is quite amazing at the same time but it was very small so over the years now um I've seen decent just Finance grow substantially um even peaked I think at some point over 200 billion worth of value looked across different smart contract infrastructures um I think are they peaked at 28 billion or something so substantially grown quite a lot it's still small compared to finance in general but for us um you know a bunch of kids building a future of finance that was quite amazing from what you initially wanted Ave to be and what it is now do you feel like it's you accomplished a mission how has it changed how does it differ from your original vision well the original Vision was just um you know democratizing Finance providing everyone access um and and mainly the the same equal opportunities so that that has been always the the vision of what we want to do increasing Financial um and and also social uh participation and looking back now I I think we've been able to achieve um some sort of kind of like uh success in in our community um I think I think kind of like the game isn't over yet because I I just feel that D5 has so much potential um it's just for me when I talk about DFI I usually think about D5 as just Finance it's just better faster stronger Finance um and I think that's the mindset you have to think about it if you want to build uh beyond our community so I think the part has been uh right for the other protocol especially because it's now decentralized is it's governed by the community so anyone from here can become a delegator create a delegate delegator platform and um become a kind of like a protocol politician or you can as a developer contribute directly to the protocol and improve it and I think that's a big part of decentralization so I think we're in the right path that's kind of interesting because I feel like we've seen D5 go from nothing to something I mean forget different Primitives so we can have stable coins until a few years ago like we remember this space before stable coins existed and uh and you kind of saw everything through the the peak of D5 summer and then a lot of things I miss those yields uh well let's not forget covet in that same window but um do you feel like interest in D5 has gone down um in terms of like the sentiment I would say not necessarily no I think I think that I meet more people that are interested in the Eastern Enterprise Finance um something that has changed um especially over the past maybe um a couple of years and especially the past year is that Defy is no longer the entry point uh to web3 that basically means that we have we onboard more developers and more users into the space that doesn't necessarily come from the D5 perspective that might be the Creator economy that might be through dial participation that might be through web3 social um but that's actually a good thing because you might be you might onboard from one particular area but you might then gain interest in um in DFI and I've seen this happen you know also um in in in the space and I I would say that um building defy has changed a lot so um there is not any more kind of like a gap filling so especially like few years now we've we've been feeling different kinds of gaps in web3 um you know we're looking what kind of um transactioning we have in traditional finance and and try to kind of like create similar maybe a bit more improved ecosystem or improved uh protocol maybe it's like swapping or lending um and and have it in in D5 and I think now it's just kind of like a different time to build where you have to build in a way where um you have to figure out like what is the thing that actually suck in traditional Finance um it's a big list yeah it's a big list but it's also a challenging list because um whatever whatever isn't working and you have to figure out that how you can actually use blockchain technology smart contracts everything that we have and actually improve those uh challenges and I think um the traditional Finance has a lot of things that can be solved uh with the blockchain uh with the transparency the accountability and also the the immutability and and everything can be programmable so I just think that it requires a bit more effort uh which is a good thing because whatever you're going to build um if it's gonna move the needle it's going to move a lot and that will bring new users into the space so times are just a bit different now got some fans here um well that's what I love about hackathons it's it's you get to keep things just real and sometimes a little bit interruptive but that's an interesting point because I I think a few years ago kind of the The Narrative but also just what we saw was Defy is the killer app for ethereum and we saw programmability to finance but now there's so many other entry points dials exist we have nfts as a massive thriving ecosystem you talked about social gaming all these things are bringing different kind of audiences in and of course that creates a lot of distractions for even developers because they have too many choices um but one thing I'm kind of curious about is all kind of the common complaints we heard about defy back years ago we thought it would be fixed when else you show up fast transactions no gas or cheap gas or you can cancel everything without a penalty all these things but we still want to see a massive spike in defy why do you think that is or what's missing I think also that um leverages is exciting exciting um Innovation both optimistic and zke VMS um it's it's about scaling ethereum and um you know especially with today's ethereum prices and the more users we're going to onboard um we're gonna have more uh challenges with scalability so so the the idea of being able to transact outside of ethereum and and um and and periodically settle and use ethereum as a finality layer is going to bring a lot of um space to build and I think it's quite early still because um even optimistic rollups they've been around for um I guess like a year uh maybe a year and a half in total it's at least on Main net and even longer yeah it's it's really um I know one year in in DFI is like five years but like it's still very early and I think it's the first time we actually are starting um because like when people say that you know there might not be things to to to to build in D5 I actually see more and more people coming to me and and talk about DFI and it creates this kind of like um excitement around like what could be the next things to to to build and I usually talk about talk more about those yeah yeah I talk about payments quite a lot because um you know Bitcoin in its um infancy uh was supposed to solve uh peer-to-peer uh transactioning um ethereum came um and you essentially had a virtual computer on a blockchain and you can make programmer programmable Finance which is amazing we build exciting things um and and scalable protocols and now with layer 2's we can actually go and intangibly solve the payments infrastructure because you could actually um transact uh in scale uh and maybe it even requires like a layer 3 or some sort of um additional uh solution yeah exactly but but that's like a that's like a very important problem to solve because um you know we're all crypto users and everyone has a wallet here um everyone has an NFD and even I'm pretty sure everyone has paper coins as well but no one actually is able to pay ongoing basis with crypto and and that's a big problem because you know we're the builders and we're the developers and the very first thing that we try to solve with um blockchain we we really haven't been able to do so but now we actually have a tangible choice so whoever like actually goes and starts to think about those use cases um and also beyond that not just building applications but figuring how we bring businesses uh on chain and actually use decent as Finance it's going to be valuable and I think that goes back to my experience when I was 15 16 building websites and you know at that age when you're you have some server codes you want to offset them somewhere you know you either at Google ads or then you add payment methods like credit card payments for something and strive was very popular then and it allowed it create this kind of like a certainty that you can actually trust the internet payments um and effectively what happened is that any business any part of the world could well not any part of the most of the part parts of the world could actually have a global distribution um um and and end user uh client Network and that was huge that basically bring brought all the businesses um in a financial layer into the internet and PayPal did before that even incredible uh job as well and I really love the 20 bucks liquidity mining that they had as well so it just showcases like how early we are and um if we're able to solve the payment Parts the payment infrastructure that is something where it brings not just end users but businesses into web 3 on on chain economy I think the payment obviously is an excellent point at I mean 13 plus years later after Bitcoin with the title of peer-to-peer exchange we haven't been able to make that commonplace but uh what I guess what I took away from what you just said is seems like we have now all The Primitives we need but we haven't seen those Primitives being used in ways that Find meaning to end consumers is that a fair assessment or do you feel like we still need a few more Primitives that exist in traditional Finance or maybe more in defy that are preventing us from building more useful things I think we have everything we need um we just basically need to kind of like uh move from kind of like building back-end D5 to build front-end D5 meaning that we're using these amazing protocols uh that we have and and starting to think actually like what the experience and and the flow looks like um on the end user side and how we bring closer um that tree for for everyday users or maybe settlements between businesses so I think that definitely exists and another thing that is uh very exciting and valuable is that we've we've built um interesting credit system on chain uh but it's based always on um digital collateralization and in most cases over collateralization so something that we could actually move also forward with is trying to figure out how to build a credit Network or network of credits um yeah I think that was the idea so what it means is that um you could actually use blockchain in terms of like registering different kinds of payment data repayments credit scoring um and and evolve a bit from the layer of over colonization and start building trust networks and some of them will fail you know but it's totally fine because most of the thing things in in life and businesses and startups uh fail anyway it's a lot of trial and error exactly so we want to see more useful payments we want to see a better way of thinking about Credit Systems um I guess I'm curious on with all the excitement we're seeing on icon abstraction zero knowledge proves do you feel like there's an obvious thing that we can do to integrate those types of things in D5 applications yeah and I think that's where um if we're able to prove different kinds of um uh different sort of information about yourself um when you can actually use your identity your knowledge your experience and produce data and improve that as well on chain without exposing the the exact data as well you can actually start building interesting use cases around um validation of of let's say trustworthiness um credit scoring as well so those things are very valuable for the economy because most of the people they do start with a very low um kind of like equity which means that if you want to empower and use blockchain for empowerment and especially with with D5 you have to go beyond the collateralization um because that infrastructure works pretty well it's fine but you will have to find components how do you Empower by getting and providing more access to to create it and to be honest you could actually build a pretty damn good credit scoring and credit Network on chain because you know even if you move today from one country to another your credit scoring doesn't passport so it just showcase how clunky the existing system is um and it isn't borderless and Global and I think there's a lot of ways to to fix that with um with with D5 so you can add elements of privacy too there because that helps a lot more Integrations with web 2 or just traditional finance and and defy and I feel like that's also a bit underexplored um yeah especially because uh I think I think even the Privacy itself could bring more people but um I think it's very valuable that uh D5 started as a more like a public infrastructure so not just the markets are public but also the addresses and and balances and that kind of like I created a lot of credibility um auditability as well um and and that creates a bit better Equitable uh Finance but down the line you will have to add more privacy to to D5 and and solving that aspect is is super valuable I absolutely agree um I want to come back to The Primitives again you are building a stable coin which uh has some unique features and I guess I'm curious about what go is why did you decide to build it and how does it work yeah goes um it's it's over colonialized um asset where effectively it's based on a Model where we've we've used already on eatland on the over colonization we're using it um we use the same model at Ave and where any um reductions of the colonization value will get rebalanced by liquidation so it's a proven model um and what's interesting about go is um obviously you can mint it against your assets that you are supplying into the RV protocol meaning you can also earn on your collaterals while you're minting and borrowing go but I think regardless of the technicalities there's so much information there um and and just uh from our team made a very exciting Workshop today on on the technical specifications but I think one of the biggest things that that differentiates uh go from anything else is the vision um and I think go probably will be very accessible um Assets in the D5 ecosystem but the idea is to actually get go into more payment layers and and figure out those different kinds of applications and use cases where go could actually Empower and become a payment layer for internet and I think down the line um as you know go gets adoption and there's um more scalability also I believe in this concept of of um having Choice as a user so I I frequently talk about being a liquid citizen uh on chain so where you have a lot of choices uh you can move your funds from one protocol to another and and there's really minimal risk of of doing that because everything is based on very proven uh infrastructure so as a end user you kind of have the choice of selecting um not just consumer applications but also like infrastructures payment Trails um stable coins communities essentially that represent your values and are backing the things that you appreciate in life and I call it kind of like going beyond the face value so if all these stable coins are packed into the same tracker value going beyond that means that actually you could track because of the traceability and the transparency which of these stable coins are contributing more to reduce for example um global warming or you know funding young entrepreneurs because it's on chain and basically selecting that kind of a payment currency on your day-to-day activities and by your choice you can kind of like a as a bigger group of community move the needle uh more so I think that the the vision part of um getting into payment rails and and helping koi says effectively a tool um it's you the builders that can actually build something tangible where uh more people have access to to go um and and have have value um uh in in in these use cases that is a really uh that's a really good way to think about that I think people are already choosing different front ends or protocols based on what they like in communities but extending that to money is something that you just didn't think you could do before I actually had an idea once that we should do at other like uh 15 different front ends and let the users just choose um and because that that gives more optionality end of the day well I think social kind of peers through everything eventually yeah that's amazing well let's let's try to talk about something that that's more practical for for Founders here or people thinking about going into D5 you kind of said that people are not coming to you more and more which is interesting because from the surface it looks like we're not seeing too many D5 launches or the things we're seeing is more reversion upgrades from things that are already out there so I'm kind of curious on if somebody's thinking about building in defy what should they not do I think they shouldn't rush [Laughter] for many reasons one for for sure is that you know it's it's um if you're building the E5 it might be very um Mission critical um software so a good example is that if if there's a rocket that that doesn't make to the moon or let's say to the orbit um that might be a hundred million 150 million uh issue um if if a substantially High D5 protocol uh gets exploited that could be that could cost billions um so some sort of uh some sort of kind of like generality of of risk um is important risk management um and also I would not go too fast because you have to take time to to to to to build things but um especially if you're you're gonna think of becoming a Founder there's a lot of new things that you're going to learn um and spending time and learning um is is probably the most valuable uh thing to do and I think in my early days things were moving super fast um and I kind of like regret that um I didn't try to slow down and and and and take more time in in learning a lot of the things I'm doing now do you have a kind of Frameworks for how you think about what idea to pick and how you should think about starting something now in 2023 in D5 a lot of people comment on in in terms of like showing kind of like proposing improvements into existing infrastructure so um creating a slightly better amm or or slightly better Landing protocol or slide to better uh stablecoin but I really recommend to do something that is very contrarian and you know maybe even um isn't isn't really a marginal Improvement on the existing D5 ecosystem but actually something that is very even risky but if it works it really proves something um it's actually like can actually prove some new use cases um as well um and also um critics advice is that you should ship I would not say ship slowly but ship shipping in a way that um you it helps you kind of frequently oh I see like frequently but small small updates um will be the good idea small updates small updates that's incremental increment incremental ligamental progress but not incremental ideas I usually say that like the best case is to ship every week something out even something small like you want to leave a Friday night um your computer by you know getting something out and probably by Wednesday it's by by uh Saturday it's already broken but who cares you know it's you're doing it also for fun um and if your app isn't breaking once a day you aren't shipping fast enough that's another lesson I have sometimes don't don't do that instead of security security matters it's not a big asterisk there front ends can break and test net in test net that's fine well I think that's a wonderful note to end on Sunny thank you so much for sharing your insights and feel free to grab him later for tickets to Rave yes [Applause]