Bankless - EthCC #6 | Stani Kulechov - "GHO is the Next Big Stablecoin"

Starting point is 00:00:02 Welcome back, Bankless Nation to the ETH-C-C experience. We are almost done in this series of episodes. On this particular episode, we are talking with Stani from Avey, who is also pioneering the world of the Web 3 social media revolution. Stani is always such a treat. I always see him whenever I'm going into that neck of the woods, the Europe, London, France side of things. He's always around there, and he's such a treat.

Starting point is 00:00:24 In addition to, of course, talking about Avey, we also talk about the ghost, stablecoin, brand new decentralized stablecoin out of Avey, but also just get a huge. temp check of the app layer of Ethereum and just a vibes around the crypto space. So I'm quite sure you're going to enjoy this conversation with Stani from Avey. For these episodes, we would usually do our pre-recorded ads, but since they're so short, we're doing a speed run of these ads, and so here that is. One of the big themes of ETHCC week was the launch of the ZKEVM. Three different teams all

Starting point is 00:00:53 launched their test net. And while everyone is trying to claim who was first, we can confidently say that ZK Sync has been focused on the ZKEVM for the longest. The Golden end game of the ZKEVM has been the vision of ZK Sync since the beginning, and during ETHCC week, they launched their 100 days to main net plan, which is now already down to 93 days. So if you're going to join the ZKEVM Wars, make sure you post about it on Lens, the first decentralized social networking graph. In crypto, we say not your keys, not your crypto, but on lens, we say not your keys, not your content. Own your own social media handle, choose your own algorithm, and mint your profile using the secret code word in the show notes. And something

Starting point is 00:01:30 that's likely going to be talked about on lens is of course the Ethereum merge. And the merge is why you should be staking your ETH with Rocket Pool. It's a decentralized Ethereum validator network where you deposit ETH and get your REath in return. And then you can take that REth into DFI. And if you run a node, you can let other people deposit their ETH into your node and you earn 15% of their staking commission as payment for your node operating services. And then maybe you want to take your REth over to Arbitrum. For all of your DeFi things, Arbitrum is where you have to be. With over 35,000 contracts deployed and one million unique addresses, Arbitrum is leading the way into the age of roll-ups. You know how I know

Starting point is 00:02:05 all these numbers? Because I watched Arbitrum's talk at ECC, which you should definitely also watch, but not before you're done watching this video first. But in order to get your money over to Arbitrum so you can buy your R-Eath natively, then you should use Juno, because Juno is the fastest bridge from your checking account to an Ethereum Layer 2. A checking account to an Ethereum Layer 2 is absolutely crazy, and it just takes minutes. Juno is your crypto checking account for the crypto era. But when you're doing all of these things, make sure that it's on a privacy first browser, which is why you should be using Brave. It blocks all the browser ads.

Starting point is 00:02:37 It's got a native Web3 wallet, and it puts the user first the Web3 way. And so I hope you use all of these sponsors on your quest for going bankless. And now I bring you Stani from Ave. Hey, Sonny, how's it going, man? Very good, David. Thanks for coming. Yeah, where are we? We're in Paris for ETC. Yeah, and are you excited about that?

Starting point is 00:02:55 I am super excited, yeah. It's a bear market, a lot of people, and full of builders. Full of builders. It's, of course, both a build market and a bear market at the same time. But before we go into what we're doing in the build market, I want to kind of recap with you, the bull market. What are the big lessons that you learned in the 2021 bull market? Well, bull markets are nice because they get a lot of traction

Starting point is 00:03:17 in the sense that we have more and more audience and visibility into the space. But I think some things we learn quite heavily is that during the world market, There's a lot of things happening at the same time, and we call it kind of like a noise. And essentially, a lot of projects that come out, we spend less time on actually looking into the fundamentals and understanding how a protocol or product affects the ecosystem, what are the fundamentals, and also validate those ideas. And I think that's something that always gets like less attention during a bull market. And I think that's what we learned recently that despite of the market conditions, like we need

Starting point is 00:03:53 to build very sound systems, especially in decentralized finance. So let's go through some of the things that we know are valid things that maybe we didn't really totally get right in the bull market, but we know that they're going to stick around. So like NFTs, for the most part, like, there are definitely some parts of NFTs that, like, are definitely going to stick. A lot of them kind of drifted apart. Yeah. And there's like other parts.

Starting point is 00:04:15 There's the whole like defy 2.0 part of the bull market. And what are the things in the bull market that we experimented with that we need to iterate on in the bear market that we know we're going to be things in the future. Well, I think it's quite a lot of also relates to the governance. So we have very interesting, I would say, like a defy community is now forming and governing some of the major protocols. So the governance game is still going on. So I think that's not over yet.

Starting point is 00:04:38 So we will see a lot of innovation and iteration there. In terms of the decent interest finance, I think we, as its defy is open ecosystem, we see a lot of innovation coming in. And the kind of like a defy type and no movement was interesting idea of like getting more innovation, but a lot of these ideas should be kind of like validated more within the community before they're actually accessible for a wider DFI community. So I think the part that we did really well also is that we saw more builders coming in and trying to solve different kinds of things. You know, we're working on under collateral as loans, for example. We see a lot of

Starting point is 00:05:13 things being built already the DFI primitives that exist might be, let's say, the AVE protocol or some other protocol, and the compatibility. And I think one important thing is that many of the new users that are coming into the space, they are actually also onboarding to these layer twos that are actually enable lower cost transactioning, but are still inheriting the security from Ethereum. And I think that's going to be like the path where we have to also focus upon. What would you say, because you're a veteran of the 2018 to 2020 bear market, how would you say this bear market feels different? I think in the previous bear market, there was a lot of ideas and I would say like team excited to build new things. A lot of the things that

Starting point is 00:05:52 were good on a paper weren't actually good in the execution or even validated well and didn't have necessarily a product or protocol market fit. Now in the current situation, we actually build a lot of things during the bear market. So we build a very extensive decentralized finance ecosystem. There are protocols that are very resilient, battle tested, and they work very well. So we have like a very good infrastructure. We have a better Oracle infrastructure at the moment. We have a lot of communities, DAUs that are governing different protocols, for example, and most importantly, some of these protocols are earning treasury. So they have actually cash flow to allocate to different grants and further development of that particular ecosystem. So we actually have sustainability now.

Starting point is 00:06:37 So I think a lot of things has been built. So there is value, and markets usually don't correlate the value or the culture that we are building in the space. And so when we put all of these pieces together in this current bear market, But there's the idea that we're not just going to magically wait out this bear market. We need to build our way out of this bear market. So when we take that frame of mind, what do we need to get done in this bear market to turn this into another bull market? Like, what do we need to build? I think we have built very exciting, like a financial ecosystem within WebTree.

Starting point is 00:07:09 And I think we're going to see more and more innovation. So we're going to see more smarter solutions build as well. I'm personally also excited about the non-financial use cases. and this is something that also Vitalik has been talking about in the space. And what it allows is that we can actually onboard more people into the Web3 ecosystem without thinking of the financial path. Because as long as you have to actually buy certain assets to participate in governance or pay for transaction fees, you always buy yourself into the ecosystem.

Starting point is 00:07:38 But if you can actually create a path where maybe your first thing that, and your first interaction with a blockchain is maybe meeting a decentralized social media profile and following other profiles in the space or, you know, participating in communities without actually having that financial part. We unlock the blockchain to massives in a way where they don't have to think about finance. And less speculation will happen as well, in my opinion, because you think about blockchain as utility. So that was definitely a big theme in this last bull market where you would buy your way into a Dow and you would have like access to the Dow tokens or you would buy your monkey picture of JPEG and all of a sudden you're part of that community. But where you would buy you

Starting point is 00:08:17 you're saying is that if we're going to get out of this bear market, we need to figure out ways to reach out to people that don't require capital, that don't require money so that they can be onboarded into this ecosystem. The whole like money aspect, while it definitely triggered the whole mania of 2021, it also like turned a lot of people outside of crypto off because of how like financial it was. So you're saying that during this bear market, 2022 bear market, we're going to need to find ways to onboard people into our ecosystem that they don't have to buy their way in. they still get to participate. They still get to do like crypto fund things, but it doesn't necessarily require capital

Starting point is 00:08:51 to get onboarded. Is that what you're saying? Exactly. And the idea here is that you create an economy where you might have financial protocols and use cases and a lot of those non-financial use cases. And that's why you get more people into the ecosystem. And those users that are not using the financial protocols, they will be the future users of them.

Starting point is 00:09:10 So essentially, especially when they create this kind of like an on-chain footprint, that can be used, for example, for builders. can build products where they can show that which applications or protocols you actually use and what risk appetite might fit you based on your Web 3 social footprint. And I think that's very valuable because that brings more users into the Defi ecosystem and empowers more people. Yeah. And when it's free to onboard, I would imagine the sheer numbers of people will more than 10x versus what it would be if we had to charge to onboard, right? Exactly. So we'll be able to onboard so many more people. And just like as a result of that,

Starting point is 00:09:45 so many more people will be proximate to like the defy apps. And maybe they go to like uniswap to go from euros to dollars rather than, I don't know, like their local bank perhaps. Yeah. And I think that's an interesting kind of like a vision because we already build an amazing financial infrastructure. So now we have to just build those other parts. And those are the things that actually get people here as well because like not everyone

Starting point is 00:10:08 might necessarily be super interested about finance in general, but everyone uses finance one way another. And being able already to be onboarded into the Web3 ecosystem, by, let's say, by Dow's that doesn't require you to actually buy yourself in, by creating, let's say, lens profile and posting Web3 social media or some other similar kind of like a use case. What we create is an ecosystem of potential users. And essentially, if you're already a Web3 user and you're using those other parts, naturally you will choose decentralized finance because obviously it has of benefits. And we saw with centralized finance, like how important DFI is. Certainly, certainly. So what are these non-financial use cases that are going to bring people in?

Starting point is 00:10:51 Do you have any thoughts as to what do these things look like? I personally have few ideas. I definitely believe in the idea of communicating with peers on chain in a way where you can retain data. That's interesting. The tree social is interesting. Music is quite interesting. There's a project called Stems Dow, which is focusing on actually onboarding creatives into the space. and essentially creating different kinds of beats and sounds and music and also have this kind of like a remix component there. So you have this kind of like a content music compatibility as well.

Starting point is 00:11:23 But these are just examples. Like you can actually build like anything on chain and you don't need to actually use the whole on chain ecosystem, even the infrastructure, even if you are building something on layer two. So you could essentially build a protocol that is on chain, but actually the data is stored on IPFS, RV or something else. So there's sort of opportunities and how you, you actually built things.

Starting point is 00:11:43 So we are living in a very, very good times for builders. Going a few years back, it was so hard to even build on Ethereum, for example, because of the less of information available and the technology wasn't that right. So this is like the golden times to build. And so there when it comes to a lens protocol where this is like your on-change social graph, I think this unlocks just like not only is lens protocol like a single application, but it's actually a platform for many other applications. So what's going on in the world of building on top of lens?

Starting point is 00:12:13 What kind of activity are you seeing there? There's two kind of activities. So we've seen, especially because we have done a lot of hackathons, we've seen teams building very base layer. For example, we have Lenser that is essentially a frontend that shows all the content that is in the Lens protocol, and you can essentially post, follow, comments, and mirror is kind of like a retweeting, but essentially with monetization in mind. So if you amplify someone else's content, you essentially can get also mirroring fees.

Starting point is 00:12:40 from that creator. But also we have Lensube, which is something similar to YouTube. There are very base layer, but we've seen interesting things like Tea Party, which essentially uses sold-bound tokens to reward on interactions that you have on the Lens protocol, which is very fascinating use case for sold-bound tokens and the Lens protocol. Stems Dow is essentially building something where you actually have all those stems and music and sound as essentially NFTs and posts in the Lens Protocol and focusing on the music audience. And more and more of the applications we've seen being built, they're focusing on actually one very important thing, which is the experience layer.

Starting point is 00:13:17 Because if you want to win Web 3 social game, given how big the Web 2 social media companies are, we actually need to build a better user experience. And also we at ABE with our Lens team, we're building our own application as well and kind of like showing how far you can take the experience for the users and what kind of interesting things you can do with on-chain data as well and on-chain problems. clause. One thing that I've noticed being built and is overall capturing a ton of attention in this space is like this data stack, this decentralized data stack that is at the back end for so much of this technology. So like Lens Protocol, I think, is a very surface area level where these are talking about NFTs that are social graphs on Polygon, but there's also so many other aspects of this data stack. You have things like R-Weave, which I believe Lens Tube puts all of the video data onto R-Weave, for example. And there's also like file coin, for example. But there's also

Starting point is 00:14:09 ceramic network and there's just a bunch of data stacks. And the disco is also like the user interface for all of these things. Do you have any thoughts about this like coming data stack and really what can it unlock for the next run of crypto? That's one of my favorite things to think about because the lens protocol itself is agnostic how you store data. So with lens protocol, you can create a on-chain infrastructure. So the protocol is modularized. You can build modules, for example, how to follow other profiles and maybe to follow some profile, you might need to have a membership into the, for example, bankless Dow and have a specific NFT, then you can go over that part. But then you have the other part, which is the off-chain part. So you can, with the protocol,

Starting point is 00:14:48 essentially, decide where to store. And I'm most excited about the middle layer, which is being built. So there is, obviously, there's a graph, which is building a kind of like a decentralized data layer, the lens team built, the lens API, which is going to get decentralized in the future more, but essentially was built to boost-strap the development on the lens protocol. And it indexes all the data that you have on lens and also kind of like a bit beyond that and it makes it easier to interact with that data. So essentially to build an application, you don't need to be a Web3 builder. You can use the traditional format of APIs that you have used to. And I think that that layer is going to build further because our goal is to open and create an open algorithm platform where

Starting point is 00:15:30 data engineers can come actually and create different kinds of ML algorithms and provide those different services to the users, and the applications can reflect which of those algorithms are useful for the users. And it becomes like a distribution channel. So if you build a module that has interesting logics, the application might use it. If you build an interesting algorithm, which is transparent, for example, it might get traction on those application layers. So it unlocks this idea of like why we're actually stuck with one algorithm in Twitter, for example, or in TikTok, why we can open the systems to all of the users and let them basically decide with their feed or their choice what algorithms they want to use and which

Starting point is 00:16:08 one serve them the most. And that's what the lens protocol middle layer is trying to solve. And how important is this whole data stack towards the non-financial use case of crypto? Very important because with the Web 3 footprint, actually we can get different kinds of data in terms of like what's your interaction in the ecosystem. So we can see, for example, what might be the Dow's you're super excited about, what NFDs you might be interested in collecting which protocols you are using and how you interact with the lens protocol. And on top of that, like, the users can always choose at how much they actually want to keep things private or whatnot. So you have this kind of like an ecosystem of value that can

Starting point is 00:16:48 actually be used within the data layers as well. And we, for example, in the onboarding phase, now it's a closed beta, the protocol, but we have been a low listing different communities. For example, if you hold particular NFT, you can actually claim your lens profile. If you were a member of the bankless Dow, you can actually also claim your profile and one community at a time based on the on-chain data. And then there's a component of off-chain data as well. So data is a spectrum and identity is a spectrum and part of it is an on-chain and off-chain. And being able to use all of that through the API is very valuable for the users. I know we've been talking a lot about the non-financial use cases of crypto, but I want to also make sure we talk about this brand new stablecoin out of Avey.

Starting point is 00:17:29 Can you give us like a speed run, a TLDR of this new stablecoin? Definitely. So the way the AVE protocol and the AVE market's work is that you simply supply different kinds of collaterals into the Aver protocol, for example, EIT, and then you're earning interest on that EIT. And typically when you need liquidity, you usually borrow one of the stable coins that the AVE protocol has. So the market is very diverse. There's a lot of optionality. So what we're doing is essentially we're adding an ability to mint a stable coin, which is the go. And meaning that it's going to be the first stable coin, which is over collateralize, but also at the same. time you can earn yield on your collaterals that you're supplying into the AVE protocol. And you don't need to basically create a separate vault for each and every single asset, but you can use your whole portfolio to get the powering power and mint the go stable coin. And if you are the holder of SDK AVE, which is basically staked AVE and you are backstopping the risk of the protocol, you can mint it as a discount. So essentially it's a way of getting liquidity from AVE more and brings more optionality.

Starting point is 00:18:30 and the other stable coins that are listed in the protocol, they're not disappearing anywhere. It just makes the whole market more diverse. And it's part of our kind of like a bigger vision where we want to see that stable coin going into L2s. For example, you should be able to supply and borrow the stable coin also in, let's say, optimism and arbitrum. And we believe that we have a lot of potential for stable coins to become the actual internet money, but also solving payment problems in real life. example today, Argentina is a good example where you have inflation that is doubling all the time and the stablecoin usage is increasing beyond that, but essentially most of the

Starting point is 00:19:10 transactioning between crypto users are happening in centralized exchanges. So from one finance account to another and we want to change that. We want to ensure that these transactions can happen actually on layer two and we want to see more developers building payments applications on top. So we want to kind of like a push a bit forward the organic adoption of stable coins beyond the current like the EFI ecosystem. Well, Stani, with the destruction of C-Fi lenders and the blowing up of UST, and also just like the very negative attitude that outside, crypto outsiders have towards crypto because of the financial use cases, what I see you doing is building out the social use cases of crypto,

Starting point is 00:19:48 the Web3 social, which is very much needed in the world of Facebook and Instagram, building out brand new stable coins that are backed by tried and true protocols. And also just kind of like changing the game when it comes to like defy and and in social use cases. So I'm super bullish on everything you're doing. So thank you for contributing all of that to the space. Thank you so much for having me here and giving the opportunity to talk to you. Cheers. Thank you.

Bankless - EthCC #6 | Stani Kulechov - "GHO is the Next Big Stablecoin"

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.