Unchained - Stani Kulechov on Why Aave Is So Successful - Ep.212

Episode Date: February 16, 2021

Stani Kulechov, founder and CEO of Aave, comes onto the show to discuss the lending protocol and second-biggest DeFi project by total value locked. Here are some of the highlights:  How Stani’s background studying law and his passion for fintech led him to the world of smart contracts (1:53) Why he decided to transition ETHLend to Aave, and how that eliminated the “meme” narrative (5:55) How Stani would explain Aave to a five-year-old, or your normie friend (9:04) What new features were released in Aave v2 (15:54) reducing overall gas costs aTokens swapping collateral debt tokens What Aavenomics is and how the “safety module” attempts to keep the protocol secure (20:39) How AAVE works as a governance token Active versus passive risk in governance staking How Aave is transitioning from a centralized to a decentralized protocol (25:01) what he's finding difficult about this process issues with voting and an over-reliance on the Aave team delegating voting power to what he calls “protocol politicians” and whether this is good or bad for DeFi Who is using Aave and how they are using it? (37:27) what OpenLaw is and how OpenLaw contracts work how credit delegation, or unsecured loans enforced by law, differ in v2 vs V1 how people could use lending protocols to build credit What Aave plans to do with the E-Money (EMI) license it obtained in the UK (50:51) Since Aave was a pioneer in flash loans, which are responsible for the majority of DeFi attacks, whether Stani would do anything differently (53:12) Aave’s partnership with tokenized real estate project RealT and how Aave manages it given that, in the US, RealT tokens are securities and can only be sold to accredited investors (58:42) How Aave has been thinking about scaling given the high fees on Ethereum (1:03:57) Why building a moat in DeFi is impossible (1:07:16) What is next for Aave (1:11:40)   Thank you to our sponsors!  Crypto.com: https://crypto.com/   Episode links:  Stani Kulechov: https://twitter.com/StaniKulechov Aave: https://aave.com Aave stats: https://aavewatch.com   Protocols mentioned ETHLend: https://www.prnewswire.com/news-releases/ethlend-announces-launch-of-new-parent-company-aave-300713825.html Aavegotchi: https://www.coindesk.com/defi-game-aavegotchi-preps-for-jan-4-mainnet-launch-with-nft-auctions RealT: https://medium.com/aave/realt-market-coming-to-the-aave-protocol-da4499a1e965 Yearn: https://yearn.finance/ Uniswap: https://uniswap.org/ Sushiswap: https://sushiswap.fi/ Kyber: http://kyber.network/ Balancer: https://balancer.finance/ $LINK: https://chain.link/ Aavenomics Aave’s documentation: https://docs.aave.com/aavenomics/ Safety Module: https://docs.aave.com/aavenomics/safety-module Summary: https://aave.com/aavenomics/ More background: https://defirate.com/aavenomics-upgrade/ Decentralization concepts Handing off admin keys: https://decrypt.co/46544/aave-officially-hands-over-governance-keys-to-defi-community + https://medium.com/aave/aave-admin-key-handover-3e09e603d348 OpenLaw: https://www.openlaw.io/ Protocol Governance: https://www.theblockcrypto.com/linked/73336/defi-lending-aave-token + https://docs.aave.com/developers/protocol-governance/governance Other topics Electronic Money Licence: https://www.theblockcrypto.com/post/75845/aave-uk-fca-emi-license-defi Unsecured Loans: https://www.theblockcrypto.com/post/70678/aave-launches-new-service-for-unsecured-peer-to-peer-loans-on-ethereum Flash Loans: https://www.theblockcrypto.com/genesis/93740/flash-loans-as-a-capital-boost-tool Aave Version 2: https://medium.com/aave/the-aave-protocol-v2-f06f299cee04 + https://github.com/aave/protocol-v2/blob/master/aave-v2-whitepaper.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, all. Just a heads up that's starting Friday, you'll see an additional episode in this feed every week. Instead of publishing just one in-depth interview about a person, project, or topic once a week on Tuesday, we will also now, on Fridays, release a shorter interview more closely tied to the news, topped off with a recap of all the biggest crypto news stories that week. These episodes have been coming out under the unconfirmed brand on a separate podcast feed. But seeing us how everything is released in one place on YouTube, it made sense to also consolidate the two shows onto a single feed for podcasts. This Friday's episode is with one of the sharpest, most entertaining figures in crypto,

Girl Gone Crypto, whose Crypto Minute videos make the rounds and give us all a laugh every week. Be sure to tune into that, and next Friday and Tuesday, we will be hearing from people both at the forefront of blockchain tech and cryptocurrency in quite different ways. We look forward to being in touch with you every day. every Tuesday and Friday on Unchained. Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, a journalist with over two decades of experience.

I started covering crypto five years ago, and as a senior editor at Forbes, was the first mainstream media reporter to cover cryptocurrency full-time. Subscribe to Unchained on YouTube, where you can watch the videos of me and my guests. Go to YouTube.com slash C-Unchained podcast and subscribe to today. Crypto.com, the crypto super app that lets you buy, earn, and spend crypto, all in one place. Earn up to 8.5% per year on your BTC and more than 20 other coins. Download the crypto.com app now to find out how much you could be earning. Today's guest is Stani Kulachav, founder and CEO of Avey. Welcome, Stani. Thanks for having me here, Laura. Happy to be.

You have an interesting background that pulls together several strands that touch on different knowledge areas relevant to crypto. Why don't you tell us how you got your start in this space? Yeah, definitely. Not a usual background in our industry. Well, everyone has quite a unique background here. But I started probably four and a half years ago getting into the space, practically in the product side and and building protocols in decent class finance. And actually, I found Ethereum when I was still studying law.

So by education, I'm a lawyer. And during my last years of my studies, I wanted to understand better how we could make contracts, like legal agreements, more efficient. And part of my research, I studied, I tried to research AI and a bunch of other automatization, but I stumbled upon Ethereum and smart contracts. And the idea of immutable contracts and code made a lot of sense to me in form of execution, that you always have legal agreements kind of like that execute no matter what. And before that, actually, funny, I was building before law school financial applications in Finland.

FinTech, which focuses more on user experience. And somehow there's sort of regulation involved in FinTech, so ended up kind of getting more excited, like understanding more the legal and jurisprudence side. And that's how I ended up all the way here. Yeah, and I think it's interesting because when I look at Avey, I feel like I can kind of see that background coming through, you know, especially like right now at this time in crypto where a lot of stuff that needs to be built in crypto actually does look more like fintech because you need to connect this new financial system to the traditional line.

But let's also talk about kind of this little interim period where you had started something, a different project called ETHLAND. What was that? How did that lead you to Avey? And then I'm very interested to hear you tell the story how you manage that transition from one project to another. Well, it started mainly when I definitely started to practically understand more smart contracts and how they work. And because I always, like I tried to solve kind of an idea that how you make legal agreements more efficient.

But I quickly realized that actually what smart contracts can do, they can actually provide more efficiency into finance. And one of the things I tried to kind of like understand, like how we could make a, kind of on-chain smart contract where there is a lending transaction where the actual borrower has an incentive to repay back the loan. And normally it's not so obvious because the Ethereum, how it is,

it's practically pseudo-anonymous, so addresses do not have any identities. So it's very hard to do any kind of lending or loan transactions. And what we kind of realize is that actually you could use various cryptographic assets as a collateral, post-a-collateral as a borrower, receive funds from the lender, and then as there is more collateral in the protocol,

you're incentivized to repay to get back your collateral, whatever it is. And during that time, there wasn't that many different collaterals, collateral types. But the idea of work, I mean, the whole DFI space is more or less about over-collateralization and collaterals in essence. So it was just a small proof of concept that we developed and evolved into a community and then just evolve into something else. I never wanted to do a startup like this. It was not my plan at all. And so how did you decide to transition from Ethlyn to AVE?

It was a difficult decision because, I mean, when we created the ETHLAN product, it was very early. It was 2017, and we kept building it, but, you know, we're practically creating a product into a market where the ecosystem wasn't kind of wide enough. There wasn't many users and there wasn't even stable coins. So people were kind of posting collaterals and borrowing EIT or practically US-D-PEC'd and, you know, it was very, very challenging an environment. Plus, the user experience wasn't as good at this. It is today.

If you look at ABE today or UNISWAP, we didn't have that kind of things. And what we realized during 2018 is that as the ecosystem started to grow, is that a pool model makes a lot of sense. And this is what, for example, Uniswap had. And we understood that now that the collaterals that are on Ethereum are getting more and more market capitalization. And what essence does is that you could actually pull the liquidity and pull the risks. And at that point, we decided to build AVE and we actually rebranded first because we

Italy in some way was actually also kind of like a meme. This was just served for Ethereum lending. And it was a funny name back then that you could lend out the Ethereum and people return it. And it was a bit of a meme. And we just wanted to have some kind of like a branding that. it was easy and recognizable. And maybe at some point even something that is easy also for the mainstream, if we are willing to go that far.

And so then how did you decide to make the transition to AVE? And how did you even message that with the community? Well, practically, at some point, we just decided, like, how, like, what steps we should do? I mean, we started to discuss with the community, like, what kind of naming options we could have, like what kind of branding we have could have. And at that point, we were even thinking, like, should we hire actually, like, a branding agency that could just make some sort of, like a facelift and come up with the branding. And we actually heard a lot of people and, and received offers. But eventually, we wanted to do something ourselves. And at some point,

we just went to the community and said that, hey, this is what, this is what we have in plan. and this might be very interesting. And people love that because somehow our community always understood that it's more than just Ethereum lending. And I think it's usually the community that pushes you further than you want to be. You know, you want to focus quite a lot. But there's so many things happening and your community wants you to like spread in multiple ways and do everything. And which is kind of like we're also excited to do a lot of things at the same time. but there's just not enough bandwidth to do things securely.

So now AVE is the second largest DFI protocol after MakerDAO. It has about $5 billion locked in it. And so actually I was originally supposed to interview you last summer. And for various reasons, we just like the news changed. And I wanted to do something that was kind of a little bit more, just some breaking news at that moment. But I looked back at that original script I had written. And even Justino last summer, it said, Avey was the fifth largest defy protocol and it had $150 million locked in it.

So suffice it to say that Avey has seen really fast growth. But I'm just curious, why don't we have you describe? Because I tweeted that, you know, I was going to interview you. And a number of people said, have him explain Avey the way he would to a five-year-old or someone said to his normie friends. So why don't you take a stop at that? Well, I usually explain very simple that with Ava, you practically see your crypto grow. That's about it. Because technically what it is, I mean, you practically deposit cryptographic assets and you get yield.

But the end of the day, the yield is in form of getting more that particular crypto. So if it's eat, you get more eat. if it's, let's say, stable coins, you get more stable coins. So I just explain that, you know, it's a way to grow your holdings, you know, not just like in value, but in quantity. And it's that simple, basically. It's just like, of course, there's the lending part. Someone is on the other side consuming, you know, and those kind of things.

But in essence, it's just pretty much depositing funds and getting yield. And you will see your crypto grow. And actually, this happens very directly because the way we designed the protocol is that if you deposit assets, you get A tokens in return. So 100 USDC means that you get 100AUSDC. And we actually developed this algorithmic formula, which means that you will see every second your balance increase wherever you're holding those assets. So it could be on your meta mask, cold storage. you will always see the balance increase, depending on how often your wallet provider is calling the balance of that asset. But that's like a very unique way to create assets, because normally

that happens in banking, but not so often in our space. And so Avey, in a way, is imitating banking, right? People deposit. Yeah, I would say what we are trying to do is we're trying to not just not imitate, but we are trying to kind of like fix the back end of finance in general. So let's say when I used to work in fintech, what we were focusing quite more heavily is pretty much like the user experience. So how to make the user experience in finance better? And this is what neobanks have been doing and all the challenger banks, electronic money providers and whatnot.

and all this FinTech is trying to solve, like improving the user experience, but everything else is held by the financial infrastructure, and that is not moving anywhere. And what Ava is doing and also kind of like others in the DFI space is actually taking that kind of like a backend of finance and improving that. So making it, first of all, open that is accessible to everyone,

to participate, to build upon. So you get developers from all parts of the world and have this kind of like transparency. That is like what we are essence like trying to, trying to solve as a in define general. Yeah. And one thing I was looking at is in terms of how quickly AVE has grown, I think something that's interesting and impressive about it

is that Avey's closest competitors, maker and compound, which at the moment rank first and third in terms of total value locks, both have Silicon Valley backing. They both have investment from Andrews and Holck. Horowitz. And, well, definitely, obviously, compound also has offered a yield farming scheme, and Avey hasn't done that yet. So what do you think accounts for Avey's success? I think there's a lot of factors involving to it. But I think kind of like we definitely created a very good

technology in one way. But also we were able to attract communities that were underserved. So I think that's the key component. So back then, I think Maker was pretty much focusing on having eat as a collateral, maybe a couple of other collaterals, very, very conservative, even though they have this kind of like a depth gap. So they can actually list new collaterals, but with limited exposure, which is really good in my opinion. And then compound was also pretty conservative. I mean, they, in, in, in form of basically what kind of assets there could be listed. How we came to the market is that we, we started to look like different communities and seeing, like, what are the active communities and, and we actually could use our product and, and also,

like, are currently underserved. So they might have some collaterals that they could use, but they cannot use it anywhere else. And the thing is that we, we started to actually look at those. And started to list them as a collateral. And one of the interesting part was there is that we adjusted our risk framework in a way that we get less exposure than other protocols that we don't allow, let's say, borrowers to get that much out of the collateral, but still we're touching a bond market that no one else is serving at the moment. And that's how I think was one of the part of success.

Of course, there's also a lot of work evolved in the technology. the communications, branding, and we participated in a lot of hackathons. Like, we're very much developer-friendly protocol. So I guess, like, one time we calculated that, like, 80% of the liquidity just comes from elsewhere than our user interface. So someone builds a product or a protocol, and it consumes a deposit there, can be yield aggregator. And I think we try to be very developer-friendly at the same time.

and we have touched a lot of communities in a very, very good moment. I think those are key things. And probably other people have more to say because it's always difficult to assess what's the real deal behind of the success. Yeah, but it is interesting. I think what you said about the difference in strategies and kind of accessing maybe more of like a long tail interest and, you know, just, yeah, finding the communities that are enthusiastic.

One other thing was so, you know, early I did ask you to describe AVE, but also recently in early December, AVE launched its version 2. What are the new features? Yeah, so version 2 is like by itself the protocol. We made a lot of savings in the gas costs. That's like one of the things. But I think the main things is that actually we made the protocol more useful for the users. So when you're depositing into Ave, you can actually then swap your deposit, let's say, from USDC to die.

If die gives you more interest rate without actually withdrawing the deposit and going somewhere else and swapping there and coming back. And then at the same time, you can also swap your collateral. So let's say that you deposited a collateral, let's say Ethereum, you borrowed USC and you maybe converted that to USD. then you went to a Tesla store or online just ordered yourself Tesla and bought that. And now kind of like you already spend those funds. Then you can still, without returning your loan, you can actually swap that collateral to something else. Let's say you have everything in Ethereum, but you want to have that part of your collateral is in some other asset. You could practically do that as well with the collateral swap.

And also you can repay your loan with the collateral. And that practically means that if you have bought a car and you don't have those funds anymore, you could actually close the loan with the collateral. And that's very much user-centric features, but they're really good because it actually kind of like makes the protocol more useful. Yeah. So basically, if I have a certain type of collateral that I've put up, and I wanted to keep that collateral because I want exposure to that price movement.

But then there's some other shiny new token that I want price exposure to. I can switch it easily without having to close out my position in AVE. Is that it? Yeah. And I think where the cool part comes is that the way the ABA protocol is designed is that you can create new markets. and each market can have different kinds of collateral assets. So in some point in the future, when we can tokenize more real world assets and other kind of assets,

and then you can just swap your exposure for whatever that collateral is. And it becomes more interesting. Let's say if you have exposure to real estate in some part of the world, and you can swap it, let's say, from Malaysian real estate to South African real estate, if those will be tokenized. there's a long process still on that kind of like frontier. But this just shows like how how exciting could be at some point. And of course, the fact that you are already able to draw liquidity against those collaterals is fascinating. And so one other thing is with the debt tokens, so if I have these

tokens that represent my debt and then someone holds that but then sells it to someone else in default, then what happens? In terms of the debt tokens, so the A tokens are transferable. So it's practically a receipt of the deposit. So you could sell your A token to someone else. And let's say you could actually use it as a payment currency. So if you deposited USDC, you get a USDC and that grows in the balance and you use it as a payment, whoever you pay it will still increase.

So that's kind of very cool payment currency. But the debt tokens itself, so if you take depth, we mean debt tokens. They're not movable at the moment. And pretty much like they could be movable, but we didn't want to make it movable yet because we're still unsure of all of the edge cases and like whether it's a security concern or not. So we decided that we mint them. Maybe there's some use case that some developer might find in a hackathon, but we just don't make it movable yet.

But we're still researching whether it's possible to do that, then kind of like trying to research, like, page cases and so forth. Yeah. Also, just all the different jurisdictions probably have different, you know, rules around what's the security or what is in. And so that could also make things challenging. So speaking of security, but in a different way, I wanted to ask also about the safety module, which is a key feature in in AVE to keeping the whole system secure, it's basically kind of like a way for people to stake. And, you know, I'm sure people who've been following the DFI space know that there have been a number of hacks in DFI.

So can you describe how the Avey safety module works, how you designed it to help Avey in the event of an attack like that, and, you know, whether you've had to use it in any way? Yeah. So the safety module is part of the whole kind of like avonomics. So kind of like how we are letting the community to govern the protocol and also kind of like carry the risk of the protocol. And it took us like roughly six months to design like perfect avonomics.

I mean, it's not just the teamwork. We had a lot of feedbacks and everything. And it was a lot of work. But in terms of how it essentially works, is that the AVE token, it's a governance token. So the token holders in the community, they're practically participating governance decisions that are risk-based decisions.

So let's say what kind of asset could be added to AVE protocol, what kind of risk parameters, for example, how much you can borrow against, what could be the incentive in liquidation to the liquidators and so forth. And because you're kind of adding or taking this kind of risk, you could transfer the risk to the token holders. And the risk transfer is either passive or active. The active one is where you take the AVE tokens as a community member

and you deposit into the safety module. And that practically means that in the safety module, you're backstopping the protocol in case of any kind of like exploit, to be failed liquidation, simply similar that happened with Maker in Black Thursday last year when the collaterals decreased in value substantially.

And pretty much like 30% of that stake can be slashed if this kind of like a shortfall event happens. Now, currently the safety module is roughly, I haven't looked on a daily basis, but last time when I looked, I think it was last week, there was one point, I think,

five billion worth of value there in total. And that is practically 30% of that is backstopping the protocol. And of course, if that doesn't cover, there's this kind of like a passive way of covering protocol deficit, which is the recovery issuance. And where new Aves mean that, and this is something similar that Maker, for example, has. So we tried to kind of pick whatever we saw in DFI,

this different kind of backstop modules and implement something that is quite innovative. Backstopping with governance and community members and let's say tokens is a very bespoke model. You rarely see something similar

in traditional finance. But I guess somehow it makes sense. It's not like full hedging. So I would say like if someone needs additional like let's say risk catching, they should go for insurance, but the idea of the backstop is that it takes care of the protocol.

We haven't used it yet, but it's something, I mean, something that it was designed to be used if something happens. So it's practically ready there at any given moment to be used. And that's how, the reason we actually wanted to build the Avenomics this way is that we understood that the most important. thing for DFI and especially to AVE protocol is that we have a healthy protocol and that it's not in deficit. And that way we get more deposits and adoption. Yeah. So speaking of your plans to decentralized governance, that is one of the trickiest processes that any team can undergo. And there's a lot

of discussions about how to do it and what really constitutes decentralized. So how did AVE decide to do it and how do you feel that that process has gone? I've kind of had this progressive decentralization. So when we launched a product, we basically we had keys to the product. And what happened is that there's two reasons why you usually keep as a D5 protocol founding team the admin case. And one of the things is that if something is found, you need to fix it quickly. And that's the kind of like a main thing. And second thing is that you also need to do it very, very quickly.

So if you are able to fix some sort of an issue within 10 minutes or one hour, that's like a, that is very important thing compared to, let's say, if you have a governance process, like full-fledged governance, you have to wait two, there's two days, voting period, one one day of kind of like a cool down delay and then you have the kind of like a fix then it's it's it's it's it's it might be problematic of securing the protocol and in our case like we uh we were definitely like confident on our work and usually like things are found very early when you launch a protocol maybe even like even after audits there might be something that might be found in the first weeks or maybe a couple first months maybe in three but then then it's already kind of like you start

to kind of like get this general consensus that pretty much the protocol is safe because there's so many air pairs that has been looking at it at the code. And for us, for us, like we had to accelerate the governance mainly because the amount in the protocol started to be substantially high and we never ever expected it to be this high. So like we were joking like when we launched Ava that if this thing goes ever like we will have like 30 million in the protocol, It will be huge. Like, it will be so, so cool and, you know. And when we just saw it grow and grow, we were like, at the same time, kind of like,

I would say, like, nervous that this is like taking off. And like, at the same time, it's good. But at the same time, we started to actually think now we have to actually give the power to the governance and do it as soon as possible. And then we practically gave the keys. And, I mean, since then it's. it's been, governance was very new to me in the sense that, you know, usually internally you can brainstorm things and maybe ask from the community, but now you have this procedures, you know,

it feels like very procedural, you know, and getting things, you have to actually campaign and nothing is like, even if you have a good idea, it might not get executed if people are not active enough to vote or, you know, maybe some of the parameters aren't like what people like. And this is like super new to me. Like it's actually, you need to work a lot to campaign. And it's kind of like, I love governance, but it's just like, it's one, another kind of like building block in our workload at the same time. Yeah, yeah. No, I can only imagine going from being, you know, not this extreme, but almost like a dictator of your own little world to suddenly just being one of the players.

Although, you know, obviously I'm sure as the founder and still as the CEO of Avey, the company, you have a lot more sway than the average person. So what is your vision of a fully decentralized AVE and how far is Avey from that now? like what else do you feel you need to do to achieve that? I think basically we have quite wide distribution in the sense that like there's sort of token holders, but the problem, I see two problems. One problem is that even though we have wide base of holders, our governance is too much relying upon the team and kind of like, not just the team doing the work, but also kind of that the team makes the right things.

And it's kind of like, it's a very helpful. heavy load on us at the same time, but also kind of like it's, it's not very contributing to the actual governance. And we're trying to figure out like how we can get a wider base to participate because, but there is participants, but the problem is that they're active when it's like very big topic to vote and then, or it's something that really concerns them out. But like how we could make everyone to participate, not everyone, but good amount of activity on, let's say, even smaller votes that make sense. And one of the things, which is very problematic, is the gas, that people just pay gas to govern. And that's, that's a problem. I mean,

if you have to pay to vote, you know, transaction fees, it's, it's not that incentivizing. And and that's one of the things why what is kind of like a bottleneck there. So we, we kind of like, From the voting perspective, we want to have more addresses voting. And of course, we want to have more addresses delegating to other addresses and having this kind of like a protocol politician. So this is the one thing. And this problem is a bit common widespread in DFI. Another problem AVE has in governance is that our governance is a bit different than Idas because in AVE governance, you can actually delegate voting power just to kind of protocol politicians and also separately the

governance power, sorry, the proposition power to someone to put a proposal on chain so that if it gets voted in, it will automatically execute and you can delegate that power to put proposals on chain to someone more technical, kind of like a

lawmaker, code makers. And what we are trying to now to do is that there will be others that are creating proposals to improve the protocol. And this is something we started to work upon recently. I mean, the version two that governance allows to actually delegate proposition power went live on December, so it's fairly new.

But we're trying to achieve a kind of like a state where, you know, there's other themes asking grants from the Aved Tao and also building the protocol so that the AVE theme actually competes with others as well in form of building. the protocol. And that's something we want to achieve. And it takes quite a lot of time. But it's kind of like an issue at the moment, in my opinion. Yeah, this is a really, really interesting part of the discussion. So in a moment, we're going to discuss a little bit more about this concept of protocol politicians. But first, a quick word from the sponsors who make this show possible.

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Conditions apply. Crypto.com, the crypto super app that lets you buy, earn, and spend crypto, all in one place. Earn up to 8.5% per year on your BTC. Download the crypto.com app now to see the interest rates you could be earning on BTC and more than 20 other coins. Once in the app, you can apply for the crypto.com metal card, which pays you up to 8% cashback Instantly. Reserve years now in the crypto.com app. Back to my conversation with Stani Kulachov. So you were just talking about what you were calling protocol politicians.

How do you define that? And do you see protocol politicians as being a good or bad thing for defy and or decentralized projects in general? I see it kind of being good and bad, but mainly good because it's very difficult to do bad things in the EFI because kind of like if something is really bad you know

the good people can always fork create a new community and it's just there's no modes here and this is something like once you see happen you know it's actually activates the the forked kind of like a protocol

and you know they it has to like kind of like respond to that and you know you know with the narrative and everything But I think with protocol politicians, I think it's good because you know, you kind of delegate your voting power to someone that has similar values as you have and more time to actually go through the proposals very deeply. And maybe they might be a team actually and they might have technical people that could actually review the code and what it actually has there. And I think that the problem, of course, is that, you know, after, after like, if you have big holders and they are getting like into coalitions, that's a problematic thing. But I think forking is the solution in every single problem.

I mean, we see, like, we can look back into Linux and see how things work in that sense. But they also, like, one of the issues of the protocol politicians is that there is no incentives at the moment. So I was actually talking in Clubhouse with Rick Burden, who's been in DFI space for a few years now. And in practically, he was trying kind of like to participate in DFI governance as a protocol politician style. And it's just like the incentives aren't like there. Because like there's if you want to do like very well being a politician, it's like it's a full time job. and just being a protocol politician just for the sake of decentralization might not be sufficient, especially when defy and like cryptocurrencies is all about incentives.

And this is like the missing parts. And I think to solve this thing, I think DAOs need to step up and start to kind of like somehow distribute actively grants and not just grants, but you know, stream funds. into, let's say, protocol politicians that get enough support. And then you have the system that they don't need to worry about, like, who pays what? And actually the DAO's will pay and they just can focus on campaigning what's important for their agenda and whoever they get mandate. And so, but you were saying some of the protocol politicians might be technical,

but then there might be others that aren't. They're just advocating for certain changes they want to the protocol. Is that how do you envision what a protocol politician is? Yeah, and the thing is like in politics as well, we have people who might be also kind of with a legal background and some that are not. And the thing with proposals that are in defy is that the proposals are technical. So you can write a nice description of what the proposal is. There is some discussion, but the law is actually the code. So when that goes to the on-chain voting, and it's important to understand like what's what the code in.

actually has in in terms of like the payload and uh it's it's good if you understand because if there's something that actually isn't correct then you know you can actually say that okay this is a problem in this protocol but uh it's a real it's a real occasion that you put something on chain that is uh highly different what you kind of like described in terms of like, it's very, would say, like a rare case. And that is why you don't need to be technical person. And I think you shouldn't be a technical person because this is a part where non-technical people can contribute and participate.

So I think that's the power of being a protocol politician that you don't need to be necessarily technical. But it might help in some cases. Yeah, it would probably help in terms of whether or not you actually do the coding, at least understanding what's possible and kind of, yeah, just how different technical considerations might affect decisions that you would want to make. So this is sort of related, you know, just in terms of the fact that this also kind of bleeds into that legal area. But one thing is you launched that credit delegation product last summer. And it's interesting because that was

what people were calling unsecured loans where they were essentially based on legal agreements. And I was wondering, you know, in the time that you had that, so there was the first version of it. And now with V2 of AVE, you have a different version of it. But I wondered even in V1, how did people tend to use it? Like who were the lenders and borrowers? And then, you know, if they were in different jurisdictions, how did they decide which jurisdiction they would handle any disputes under and stuff like that? That's an interesting question because like how we did the credit delegation version one, we practically developed a kind of like a vault where you could just put A tokens there as a

as an A depositor. And because the A tokens are there as a kind of like a collateral, so whoever you allow to access that vault, they can draw practically to that vault and then to themselves create from Aver protocol. against someone else A token, A tokens. What did actually allow the delegators to do, or the depositors, actually, is that they have now technical capability just to lend out to someone with their, kind of like against their collateral, which is deposited there.

So the cool part here is that you deposit into AVE, you're in interest, you delegate, you're in a bit more interest. But the thing is that how it is different than you will do normally is that you will actually just borrow yourself from AVE against your collateral, some other asset, and send it to someone else. And this is kind of like less of a good user experience. But in this relationship, what we did actually is that there was one borrower, for example, Diversify, and they borrowed. What happened in this relationship, they made an agreement through open law. And open law is just a kind of like a docket sign type of a application.

which with additional twist. And the twist is that you can actually put into the document executions as well, let's say point certain conditions to certain addresses. And then when the contract is signed, whoever signs as a last one, can deploy a contract. So in this open law template, which is pretty cool, you could actually, the last person who signs it deploys the vault. And once it's deployed, then the, the alligator just funds the world and then another person draws the credit.

And this open law template, you could just choose like different jurisdiction, England, dispute resolution clause, arbitration, how many arbitrators. You could choose choice of law, let's say English law. And then you could, of course, the parties put their names and everything, pretty much like the same way as DocuSign works. And then, of course, the addresses, who is who and so forth. And that's how it was the case. So we created a legal wrapper.

But also at the same time, we had another kind of interesting credit delegation type is that where depositors were delegating into a smart contract vault that did something in DFI and could only do one particular function. And that contract didn't allow the funds to be used to anything else. So there was a Wyernwalt called YA Link which borrowed two credit delegation and borrowed roughly 15 million of USTC from AVE

via credit delegation and there wasn't any legal wrapper here because everything is on contracts and obviously as the this vault could only practically deposit into a I think they were like a farming something and then kind of like

all the revenue they were paying back to the delegators. And because this is like a close loop relationship between smart contracts and there's no like additional like a credit risk because it's in the system, that was the second type kind of like. So there was this one type where you just borrow and handle yourself the legal wrapper or just trust someone else or you do this smart contract closed loop system. Those were I did two type of credit delegations.

That's really interesting. Yeah. what you described with the open law thing is almost like it's like some kind of it's almost like legal zoom but specifically for these blockchain contracts that yeah it just sounds really interesting I also then wanted to ask so in version two so in version one especially if you were dealing

with a specific counterparty rather than doing the smart contract version of using this of these credit delegation products, that was kind of more of a workaround. But in V2, you've made it more native to the protocol. So how does that work? Yeah. So now it's super easy. So basically as a depositor, you deposit assets into the version 2.

And then you just grant a credit line to another address. And that another address just can come and borrow. This is pretty interesting because it's way easier. and this is something that we're now, we don't have a user interface for this yet, but this is something we're launching in, let's say, a couple of weeks. And the idea is that practically you can delegate

through the user interface to someone else. And also whoever gets the credit line can also manage and repay the credit line through the user interface. Of course, we don't have the kind of like, it's more of a trust-based relationship, so you will not pretty much delegate that way to someone that you

just don't know, you know. It will be like sending funds to zero. Yeah, yeah, yeah. But what's cool about this is that then the AVE governance, they could actually decide, hey, what if we allow, let's say, third parties, they could be projects that are working on other cladeless loans

or they might be CIFI lending desks or traditional institutions. what if they can create waltz where they can ask credit delegations? And that will be in the user interface. So practically, there might be a wallet that can accept credit delegations and depositors could add there. It gives certain kind of a premium. And that vault then borrows under collateralize, but does some sort of functionality. It could just borrow to lend out in centralized markets, or it could be another protocol

that is borrowing in the closed-loop system, or it could be just some fintech startup that is having some sort of lending activity and their source the liquidity this way to the traditional finance and lend it out further. So practically what it allows actually to do is that today we think about defy in a way that it actually vacuums liquidity.

So we are trying to kind of get more deposits into the space, more people are using defy that way. But one of the things, so that we're not working that much is actually how we get the liquidity out of the EFI into traditional finance with the trust networks and different kinds of ways. And credit delegation is just pretty much that. So I could imagine some beautiful day very soon. Other governance could vote that this particular world could accept credit delegations in a

user interface and it could be some sort of financial institution or a lending service provider. And then each one maybe would have. have its own parameters for the type of borrowers that they would allow or something like that, right? Like they might have their own way of scoring people's risk or something. Yeah. Yeah. So one, one interesting, like, there could be just like a project that manages, let's say, create risking and maybe lending activity. And they just take the source the liquidity with the credit delegations and then they decide, okay, we're going to give credit based on this and this and this particular parameters. And it could happen in traditional finance. So practically, they could do

even credit checks. They could do even the normal stuff that is happening. But what's interesting here is that the person that is getting the credit, whether it's consumer credit or let's say B2B credit, let's say consumer credit and buys a car. And part of that liquidity or fully could be sourced from AVE and DFI this way. So there is like a trust relationship between this financial institution and the Ava governance and that way. There's like you need to trust, trust it. But because they are doing like, let's say, lending activity, you kind of expect that they do things right if it's only based on, let's say, this kind of reputation. And then pretty much the lending institution that is lending out to their consumers, they do the credit checks and they

have recourse and so forth. And then could borrowers kind of build credit by showing their behavior on, you know, like this is my main wallet that I use to interact with AVE and here all the debts I've taken out and paid back or anything like that? Like, could that also be built on that? I think so. I think so. We've been talking with DFI debt practically because.

Travis Blaine for people. Yeah. He works at Dapper. And he's a super cool guy. And just. And by the way, he can. wanted he wanted me to ask you who's your favorite dad in defy well that's of course defy dad okay i'm glad we got to ask that i wasn't planning to but since it came up anyway go ahead

yeah and i think like what's interesting in defy that besides that he's like bringing like defy to water adoption and make it actually explaining it like to five-year-olds and i i guess he's doing it on a daily basis. But is that, you know, if you could actually have this some sort of, you get credit delegations, you repay loans and end of the day, maybe you hold in your wallet, other things, NFTs and so forth, maybe you actually form this on-chain identity that is so valuable for you and it has provenance. And, you know, and maybe that becomes a credit facility. So it becomes this kind of a new reputation. Like, I think our problem usually, is with unrecognolial loans is that we always think that we need to always think how we chase

the person all the way to the end that they repay all the debts. But actually, the traditional lending doesn't work completely like that because, for example, in B2B lending, companies go bankrupt and you might not see most of the funds that you have landed out to a business or to a startup. Many startups fail. So in terms of like private equity, that happens quite a lot. venture capital. And also in many of European countries and in the US, you have this kind of like a possibility to, I don't know, kind of file for bankruptcy as a person as well or have this kind of like arrangement that you be part of your debt. So we should never kind of like think that the recourse has to be like that you have to chase someone. And actually, I started insolvency law,

I mean like bankruptcy law. And one of the interesting thing is that our economy is more based this kind of like remorse. So if someone fails, you kind of like try to settle as much as you can, but then that the person gets back into the economy and could be like productive and, you know, healthier compared to the old kind of thinking that where debtors should get everything that they invested into. And I think if you get this kind of thinking into the on-chain, like identity and under collateral's loans, then we will start to see more like interesting, interesting, uh, understanding. collateral loans, not the kind of like ways where we go all the way back to traditional finance

and try to figure out how we get part of the payment back. But actually, like, you have so cool address-based reputation with everything that you have achieved that you don't want to lose it. But if you lose it once, it's starting fine if later you make something good. Yeah, it definitely would depend on a really good identity system, though, because otherwise, although I don't know. Hmm. Okay. I was just going to say, that somebody with bad credit could just keep opening up new addresses, but then they would still have to build the good credit and the good behavior with each one. So anyway, all right, so let's switch gears for a second to talk about the e-money license that you got in the UK, which was

granted to the UK business entity that AVE has. And I checked out on the website. It says that that is still being built. So what are you building there and what do you plan to do with that license? Yeah, so one of the things our goal was to kind of like get more adoption mainstream. And like it's just so hard to direct people to, let's say, to an exchange and say that go, go there, buy some eat and go to another exchange, buy some stable coins. Now it's a bit easier you could just say that go to this exchange, get some stable coins, get some eat and then create a meta mask and do this and that. and then you can deposit. So there's less steps now, but still too many steps to actually, like, someone to get, like, exposure into defy.

And what we want to do is kind of like narrow that gap quite a lot. So practically that you're able with your traditional currencies, so let's say pounds, dollars, euros, you could convert them into stable coins and later deposit into defy as well. So kind of like having this some sort of, like, some sort of like. an end-to-end relationships with the users in the sense that, you know, you have the D5 backend, but then you have the actual back-end where you're reaching out the normies, the mainstream. That is what we are trying to achieve.

And we're building it. It's more of like a side thing that we're trying to build, and it goes quite slowly. But I think we're going to launch something quite soon. Maybe in Q3, I think, will be the most kind of like optimistic. optimistic plan. Yeah, this is probably the part of your work, like I was saying earlier, that touches more on FinTech and is more connected to the traditional banking system. And so it will definitely probably work a bit slower and there's probably a lot more

compliance that you'll have to deal with. Well, one other thing that I wanted to ask about was Avey had pioneered flash loans. And I wondered how you feel about the fact that 10 of the 16 most prominent attacks in DeFi in the past year have involved flash loans. Is there anything you would do differently about that? Yeah. So, yeah, this is an interesting thing. I actually, I haven't been thinking that quite a lot.

And, well, one of the things is that most of the flash loans are used for actually, like, good purpose. And not just arbitrage, but actually refinancing debt, closing loan positions, let's say, before liquidators can get in and take the borrowers. kind of like part of their collateral so they can kind of pre-liquid it themselves and there's flash loans used so flash loans are actually used quite heavily in in many things last year I think there was uh two billion worth of flash loans in in from from AVE so that's like substantial amount compared to uh the hacks what the hacks kind of like do like I mean those hacks are possible to do without flash loans just having the preempt capital of course like if you're a 16 year old kid or

like something like that and you know you figure out flash loans and and that's the kind of a way you you can you know make this kind of like exploit then of course like it it does help in certain extent but what flash loan actually does more for this kind of like security is that it actually bulletproofs the protocols because you can't deploy anything out there that can't withstand that kind of an attack because if you can if you can defend a flash loan attack it means also you could defend a whale that will do similar kind of an attack. So that is my kind of like a key component in terms of like flash loans and and whether kind of like they're good or bad because there's they're actually innovation.

They bring something new and they empower developers and they empower users. And also at the same time, they ensure that developers are building good protocols that they are not getting exploited. So kind of like every flash loan exploit, means that the development team just didn't find something or they cut corners somewhere. That's the problem in Defi general because, you know, defy is not equal.

You know, there are projects that are putting a lot of effort in security. There are projects that aren't putting effort in security. And this is kind of like a problem for the space. Yeah, so with V2, you did introduce flash loans to AVE itself. And I wondered what did Avey do to try to protect itself from potential attacks? That's a good question. That's a good question because I think,

I don't, I think pretty much how security is handled is, it's really about reviewing code, thinking in different kinds of scenarios, understanding potential attacks, reentrency, any kind of like attack that related to flash loans, understanding each and every attack, like what happened, why, and other potential scenarios.

So those are one things. And whenever you introduce new code, you need to think about what are the cases that this particular code could lead to. And then you have a rotation system in your theme that every kind of developer tries to review the other developers code, and there's good procedures on that. So that's one thing. And then the second important thing is to have test cases, enough test cases, for various different type of behavior. So you should be testing more than you are developing.

That applies more into smart project-based development. And then, of course, once everything is ready and you're confident with your code, then you can actually go to auditors and say, hey, we heard that you are doing very good work. I read your previous work, and we're very confident that this is something that fits your expertise.

and then you take those third-party audits. And the version two, for example, we have five audits or fifth audit came recently. And we had formal verification, which is the mathematical proof of how the protocol works and behaves. And that's also, none of these are guarantees.

It's just like how much you put effort on security. And the more you put, the better. Like, there isn't limitation, like how much you should or should not put. Like, you should just put everything, everything because the stakes are high. The example where we thought that there was 30 million will be in Avey Protocol, and then there's billions. It just shows how high the stakes are.

Yeah, I did an episode with Taylor Monaghan and Dan Guido about this, and Taylor was just like, people don't think that just because there's an audit that everything's safe, you know, she was just like, this is not any kind of seal of approval. And yeah, she agreed with you that. You know, it's just kind of a continual thing. And I think, I can't remember if we discussed it in that episode, but, you know, obviously where you have things like new token standards coming out, like, what was that hack? Was it the IMBT one where the new ER 777 standard, I think, caused a bug?

But they, like, that was a known thing. They just didn't do anything about it. So, yeah, it's like you have to constantly. keep up on developments and watch them for how they'll affect your protocol. Yeah, and that's a commerce security thing. I mean, if there is a improvement, you need to update your software. So let's also now talk about Avey's partnership with Realty, which is a project that tokenizes real estate on Ethereum by creating LLCs for properties and then sending a share

of the revenue that each token holder holds to their own Ethereum wallet in staple coins, which is, I think, super interesting. And in AVE Realty tokens can be used as collateral for people to borrow. And so since, at least in the U.S., realty tokens are securities, I was wondering how, you know, Avey, like what changes you needed to make to accommodate that in a decentralized protocol. It's a good question because it's kind of like a, it's a completely different pool. It's so-called like private market with permissions, permission access. So practically, in this case, the realty, they're using the Awe kind of like as technology, the smart contracts, but the market is completely private.

So everyone who participates that market has to go to their own process of KYC and so forth. And this is kind of like interesting because, you know, we recently created the feature of practically white listing and blacklisting addresses. So practically now anyone that has an interesting project in mind, they can just take the other code and deploy a market for their own purpose. It's the same as someone will use MySQL database, but instead of like using like a common MySQL database, they just use for themselves for settlements. and so forth, for the settlement's sake of transparency and liquidity. Yeah, so it's practically, that's the only way, in my opinion, to approach the kind of like a security aspect and also kind of like those assets that are not like purely cryptographic assets.

And I think we'll see a couple of other ones coming during this year. And it's interesting to see like whether the catch and what kind of attention it catches. because you kind of lose the permissionless factor where you have this interoperability, compassibility, and then you're kind of left with the security of Ethereum and the transparency that the public Ethereum provides and maybe fixed settlement system.

So the participants that are going through the compliance and participating in that market, they don't need to rely on written agreements that rely on smart contract execution. So there are still quite a lot of benefits on that. And I'm interesting, like, will those benefits by themselves be enough for this kind of projects to take this market further? And I don't know. Yeah, well, you know, I have to say something that interested me about this project. And in general,

just listening to some of the other interviews you've done, it seems that you and Avey are pretty eager to integrate real-world assets. And frankly, I feel like most crypto and DFI people view that is kind of a headache to interact with off-chain assets, because I feel like it just introduces a whole host of other problems. So why is that something that's interesting to you? Yeah, it is a headache. And the good thing about many of the things that we are kind of like partnering and talking about, especially like real world assets,

we're pretty much like technology providers. So we just give the infrastructure and rest is on the kind of tokenized, whoever is tokenizing those assets and managing. So practically we have a smaller headache in one sense. But of course, if their project succeeds, that's amazing. But also we tend to forget that most popular assets on Ethereum are real world assets, which is practically tokenized dollars, which is an interesting part because, you know, usually when we think about real world assets or tokenizing real world anything,

we think it quite widely. So, like, how to do it globally. But if you look at, like, the biggest tokenizations, they're just one jurisdictions, practically, let's say, dollars, what USC is doing. And they have just one jurisdiction, which is US dollars in that sense. That's what they do.

And I think we'll see more of, like, projects doing it more locally. So they try to actually solve locally the tokenization. And then if it works, scaling a bit further. But also it's kind of like a hope, at least personally, that we will see more value in and transfer more value from real world to the cryptographic ecosystem. Because in the cryptographic ecosystem, Decentral's finance value could move very quickly.

Developers could build very interesting concept products and efficiencies. And just the transparency itself is very fascinating. And of course, if you saw the transparency in the off chain, as well, the custodians and so forth and the stuff related, that's fantastic. But I just think, like, having this value network is there's sort of potential, and we just are scratching the surface. Yeah, yeah. No, it will be interesting to see where it goes and how it can affect real-world assets when you bring those features. So obviously right now, Ethereum has been experiencing a state of high fees for loads of different types of transactions for a while. How has Avey been thinking about scaling?

Are you looking at layer two solutions? Are you looking at other blockchains? We are quite a lot. But we are also, like, we do have a strategy, but we are trying to a bit of not to share too much. because at the same time, the layer two is not super important for us. It's more important for trading facilities, order books,

something that has a lot of transactions in that sense. And Ava is kind of like a follower in the sense that, you know, where there's transactions, there's liquidity issuance, then there's a need for secondary, you know, liquidity lending borrowing markets. But we are talking to every places, and there's already like an ecosystem project called Avegochi,

and they ported the OVET tokens into the A tokens into the MADIC. Yeah. And that was just one example. And there's other kind of like folks in the community that just want to port them. And it's sort of like a good start so that we see that it's more of a community initiative to get like later two experimentations. But we're still kind of like looking at it. But we definitely have a interesting solution at some point when we are ready. And that might come quite soon even.

I mean, it's really depends on how serious the LTS will become. And so also would you consider leaving Ethereum or trying a different blockchain? Well, kind of how I was born and raised in Ethereum. And in terms of like we've been always building here. But at the same, I also would say that like that's our like on-chain headquarters. So like in that sense like it's, it's a. very difficult to live because the culture is here, the ecosystem is here, the compatibility is here, but there are some cool things happening in our places.

I've been following what's happening in Pocodot. I've been following also like layer twos and just keeping like curiosity always. And I don't think people will copy what Ethereum has, but what I'm interesting to see like this new cultures evolve in like, you know, other blockchains and seeing like which direction it takes. And maybe if Avey has placed there. Because Ava is more about, not even about defy, but like building culture and being part of everything that is in the own chain. Like we want to empower, like finance is big space, but it's just a space that empowers other economies and cultures.

So we want to empower what's happening in the creator community, the e-commerce community on chain and be involved in various parts. And that's why we focus more culture with the branding and everything. And that's why I'm following what's happening in other blockchains as well. But I will not say we will ever live Ethereum. I hope not. I mean, this is like super cool to be here with so many. I mean, the community is very healthy. So, yeah.

Yeah, yeah. I feel like I ask this question of a lot of people. And I get a kind of similar answer. I think, you know, they're kind of seeing where things go. people do, I think, seem to have some kind of loyalty to Ethereum and recognize that that's where a lot of the activity is. Yeah. And where you can get network effects. So earlier we did talk about kind of the difference between AVE, which, you know, doesn't have kind of the traditional Silicon Valley venture capital backing. I mean, you do have some investment, but, you know, that it's just a little

bit of a different beginning that you've had. And if we even just look in general, you know, obviously, defy and decentralized projects in general are really different from traditional startups. So in this open source world, you know, which is quite different from, you know, what it would be like building a traditional startup? What can a defy project do to build a moat? I think nothing because it's impossible to build a moat. We tried because I think what's interesting in Defi is that, especially compared to the relational finance and other businesses, is that there's nothing that actually protects anything because, you know, the code base is open source and the idea is that anyone can contribute,

anyone can just take that code, improve it, and create something else. And then you can look at that and create something more better. And the liquidity also works the same way. If someone creates a better algorithm, the liquidity just moves there. and also better use experience. So there isn't that much of a thing that is protecting. But what's cool about it is that the innovation, speed of innovation is very, very quick, which makes the space very attractive and very promising at the same time.

So I think, like as a defy project or a newcomers, I think what's important is actually like how much you can keep up with the rate of innovation. So it actually doesn't matter what's the product currently you're working upon, but how your vision to improve it and what you might be doing after that product and what are the next kind of things. And it always kind of like to some extent in my thinking, it always points down to the team, like how open an environment they have to be creative.

So if the team, the founders and if they can be openly brainstorm and kind of like come up with ideas fairly usually like there is constant innovation and we see this in defy happening like protocols are innovating like constantly even though we're kind of competing as as crazy here but at the same time like it's stressful but as you get used to the idea that you know everyone is just like coming out with cool stuff and you're expected to come with some cool stuff and people like that then you kind of like i get into the mode And do you feel that the community can sometimes make it like, you know, earlier when we were talking about the difference between just being able to implement changes that you want and now having to go through this process? Does that make it harder to keep up with the pace of innovation?

Yeah, but it does. There's two elements kind of like you kind of miss a bit the surprise element in one way. So you have to discuss it quite openly on what you're building, what you're going to implement. Otherwise, if it comes out of the bushes and there's going to be a proposal vote, you have very little time to actually educate everyone, what's going on and campaign on the improvements. And then, of course, there's the procedure that you have to do. But at the same time, it adds stability. It has stability and it adds certainty.

The certainty is very important. So even though like protocols have to innovate, they have to be very secure at the same time. And changes has to be applied in a not light kind of like weight manner. So I one way it slows down, but it brings a lot of value by having more stability in the protocol. And yeah, those things are kind of involved. All right. Well, what's next for Avey? Next for AVE, I think, yeah, we're deploying new markets.

So that's an amazing thing because we've been promising to deploy new markets for a long time. And we actually found a community developer that is working on deploying them. So the next market we are deploying is actually this kind of like a AMM market where you can use not just Uniswap liquidity provider shares as a collateral, but also sushi swap shares and balancer shares and also Khyber as they're coming up with their AMM. So automated market maker kind of like where you can trade like UnisBub. And what's interesting here is. Like your LP tokens from each of those? Yes.

Yes, exactly. So you can use them as a collateral and get liquidity more. What's interesting here is the governance. So we decided because our governance model is quite unique and allows this kind of like voting strategies. and have like inclusivity on multiple tokens, we decided that we actually are going to govern that market in a way that the AVE tokens has some voting powers world, but also we give voting power to Uni, BAL, KNC, and Sushi tokens.

So practically, it makes kind of like inclusive governance so that we're not, even though it's a other product, it's not only, we're not only ones governing because it relates in one ways to the other protocols. think this is the next thing coming up in defy that you know you have projects building together things governing things together and this is where you will see like a lot of interesting stuff yeah that does it does sound really interesting all right well we'll have to have you back when when that happens where can people learn more about you and ava i think uh following us on twitter so ava ava is our

handle. We're quite active in Telegram and of course Discord. And I'm actually frequently now in Clubhouse. I'm just listening and sometimes talking there. And that's a nice place to chat about things. And if someone wants to look what our markets look like, it's Ava.com. And yeah, and if there's something, I mean, the team is very reachable. I'm quite active everywhere. Try to be as close as communicate as I can. And yeah. Okay, great. Well, thank you so much for coming on Unchained. Thank you, Laura, for having me here.

It was a pleasure. Thanks so much for joining us today. To learn more about Stani and Avey, check out the show notes for this episode. Don't forget, you can now watch video recordings of the shows on the Unchained YouTube channel. Go to YouTube.com slash Z slash Unchained podcast and subscribe today.

Unchained is produced by me, Laura Shin, with help from Anthony Yun, Daniel Nez, Dan Edelbeck, and the team at CLK transcription. Thanks for listening.