DeFi in 2021 - An Interview with Stani Kulechov
DeFi markets have exploded over the last 12 months, fueled by innovations in borrowing and lending protocols, widely accessible stablecoins, and new forms of capital markets entirely mediated by open source protocols and software on public blockchains.
One of the most innovative and high-growth players in the DeFi space is Aave, who today is the 2nd largest DeFi protocol with nearly $4B of value locked in the protocol. The entire space has grown from just around $1B in early 2020 to nearly $30B today.
00:10:06.120 --> 00:10:29.220
Jeremy Allaire: Hello i'm Jeremy Allaire, and this is The Money Movement a show where we explore the issues in ideas in this brave new world digital currency and blockchains a lot is going on in crypto and digital currencies and blockchains just unbelievable amount of market activity.
00:10:30.570 --> 00:10:40.890
Jeremy Allaire: Just continued surging growth in dollar digital currencies like us DC it's growing from 4 billion to nearly 6.3 billion today.
00:10:42.450 --> 00:10:55.500
Jeremy Allaire: defy growth has been enormous, not just in the value of the tokens but in the amount of capital that's coming into them and we're really starting to see.
00:10:56.250 --> 00:11:07.590
Jeremy Allaire: A lot of different market participants and and sectors really starting to pay attention here, and so this week i'm super excited to be joined with.
00:11:08.430 --> 00:11:19.560
Jeremy Allaire: stoney cool a child from Ave and we're gonna have a great conversation on defying 2021 and i'm sure we're going to cover a lot of really cool topics great to see sorry.
00:11:22.890 --> 00:11:23.610
Jeremy Allaire: you're muted.
00:11:24.660 --> 00:11:26.460
Stani Kulechov: hi JEREMY do you hear me.
00:11:26.700 --> 00:11:27.540
Jeremy Allaire: yeah Now I do.
00:11:29.100 --> 00:11:33.300
Stani Kulechov: Okay there's some there's some connection issues my side hope hope it.
00:11:34.770 --> 00:11:38.880
Stani Kulechov: gets better but yeah thanks for having me here on the show.
00:11:39.330 --> 00:11:52.170
Jeremy Allaire: yeah totally um well I know we were in the midst of a conversation last night on clubhouse so we'll just like just keep the conversation going, but, as I was saying before the show, I think.
00:11:53.190 --> 00:11:54.150
Jeremy Allaire: I want to start with.
00:11:54.600 --> 00:11:57.870
Jeremy Allaire: I always love to start a little bit with people's personal journey.
00:11:58.260 --> 00:12:11.760
Jeremy Allaire: And, and I know your journey like starts in obviously you have your whole life behind you, but but in terms of crypto being really early and decentralized finance really one of the.
00:12:11.880 --> 00:12:13.710
Jeremy Allaire: First, creators really in.
00:12:14.040 --> 00:12:22.230
Jeremy Allaire: In defy and i've kind of love to hear you know first just what what was the Aha moment that helped you.
00:12:23.280 --> 00:12:34.230
Jeremy Allaire: Get inspired to work on defining what was it, you know the theory and White Paper was it something after that what like where where did that start and then maybe a little bit of eastlands history and.
00:12:34.440 --> 00:12:37.410
Jeremy Allaire: And then obviously we'll we'll get into Ave in a little bit.
00:12:39.510 --> 00:12:46.230
Stani Kulechov: Okay, so so JEREMY I found the issue, I actually had the the the headphones didn't didn't work.
00:12:47.550 --> 00:12:47.820
Jeremy Allaire: Okay.
00:12:49.920 --> 00:12:53.520
Stani Kulechov: So yeah yeah definitely so.
00:12:54.570 --> 00:12:56.070
Stani Kulechov: I didn't hear every.
00:12:56.130 --> 00:12:57.330
Stani Kulechov: Everything but I guess.
00:12:57.990 --> 00:13:15.180
Jeremy Allaire: A little bit of like how how you how you got into you know your earliest inspiration getting into defy you were really early obviously in the theory and community and and just want to hear a little bit of that kind of what what inspired you to start building in the space.
00:13:15.960 --> 00:13:21.000
Stani Kulechov: awesome yeah so so it gets a pretty much i've been always a bit involved in.
00:13:22.110 --> 00:13:34.200
Stani Kulechov: finance, so I started to code very early, I think it was 13 years old, when I when I started to call php and at 15 I got excited about Ruby Ruby on rails.
00:13:34.740 --> 00:13:36.330
Jeremy Allaire: Never played with cold fusion.
00:13:38.070 --> 00:13:42.750
Stani Kulechov: I was actually I tried to do something I was too young, I think it was nine years old, so.
00:13:44.850 --> 00:13:46.170
Stani Kulechov: my brother was more into that.
00:13:48.630 --> 00:13:57.420
Stani Kulechov: And I think I was building like more of like financial applications, when I was 18 and practically I run into kind of like.
00:13:58.590 --> 00:14:07.080
Stani Kulechov: Regulations kind of like topics in terms of regulation and I went to study law and because I really wanted to understand, like in like.
00:14:07.710 --> 00:14:20.730
Stani Kulechov: How how you could build financial applications and how to deal with regulation and at some point end of my kind of like studies, I started to do research on contracts, so how to make more efficient.
00:14:21.360 --> 00:14:31.980
Stani Kulechov: Agreements and one of the things I actually stumbled upon it was if the room is smart contracts and that will say you're interesting component there that you basically.
00:14:32.640 --> 00:14:41.580
Stani Kulechov: can create code that doesn't change in the sense that you can have it as an immutable code or Community government governance code and that for me.
00:14:42.000 --> 00:14:45.450
Stani Kulechov: Was was kind of like a moment when I realized that actually.
00:14:46.170 --> 00:14:59.760
Stani Kulechov: You could create all kinds of financial applications, and you know, without the need of trust in one of the things we started to build as a proof of concept was pretty much lending and borrowing, and this was four and a half years ago.
00:15:00.180 --> 00:15:08.430
Jeremy Allaire: Right right it's it's it's it's super cool I mean I think um yeah I actually had to add a background and political science.
00:15:09.090 --> 00:15:16.050
Jeremy Allaire: And became a technologist and i've always been interested it sounds like like you in this sort of intersection of sort of.
00:15:16.560 --> 00:15:34.290
Jeremy Allaire: What governance is in the world at large and and then its intersection with with open open platforms and technology and yeah I mean, I think you know back in in 2013 when the first kind of wave of companies, a lot of wave of companies were starting like.
00:15:35.460 --> 00:15:45.390
Jeremy Allaire: You know, as a technologist what was interesting was was not just like there's this digital currency like it almost seemed like obviously yeah of course we're going to have digital currency to work everywhere.
00:15:45.660 --> 00:15:56.760
Jeremy Allaire: But it's this programmable money idea that was so powerful and you know that that can really radically change the world and so that's why I got into it too.
00:15:58.410 --> 00:16:09.540
Jeremy Allaire: And, like the building blocks just took a while to get in place, so I know if you were building eastlands back four and a half years ago right things were pretty raw.
00:16:11.100 --> 00:16:11.550
Jeremy Allaire: yeah.
00:16:11.670 --> 00:16:12.840
Jeremy Allaire: yeah yeah.
00:16:14.250 --> 00:16:30.240
Jeremy Allaire: So obviously you know you've you've taken another another attempt at it here with with Ave, which is obviously achieving enormous success now so obviously congratulations, but maybe just a little bit of the origin of Ave.
00:16:31.320 --> 00:16:42.030
Stani Kulechov: yeah I guess it was like at some point, I mean we started, we went and created kind of like first market for lending and borrowing one chain, and it was pretty much.
00:16:42.780 --> 00:16:52.710
Stani Kulechov: Bilateral order match in the sense that we had we had to users that one day to lend out assets and other ones who we wanted to practice borrow those assets against collateral.
00:16:53.220 --> 00:17:02.880
Stani Kulechov: And that was time when we didn't have actually that much market capitalization in various assets for us it's quite all so we've decided not to go to a pooled.
00:17:03.630 --> 00:17:10.740
Stani Kulechov: kind of like globalization model, and this was the time where actually stable points where existing in the end, like.
00:17:11.070 --> 00:17:24.930
Stani Kulechov: So it's a practicing the borrowing square if video or usda pick if they didn't which was kind of like a very tricky so can imagine the use case was not just not only with the beat by users, back then, but also like what you can do with your borrowings.
00:17:25.200 --> 00:17:37.590
Stani Kulechov: yeah I think was 2008 when the market conditions where i've been refunded in the sense that there was a bear market that started quite heavily and and 2018.
00:17:38.310 --> 00:17:42.930
Stani Kulechov: We kept continue like building and different iterations but we realized that.
00:17:43.830 --> 00:17:52.080
Stani Kulechov: kind of like ethan was a bit of a name in the sense that it's if they didn't lending we created the name but we understand that we're creating a little.
00:17:52.710 --> 00:17:56.670
Stani Kulechov: More Cedars infrastructure and we wanted to rebrand something that's.
00:17:57.540 --> 00:18:01.470
Stani Kulechov: More kind of like a general but has a very big Community wide.
00:18:01.830 --> 00:18:15.690
Stani Kulechov: So we we always been in the sense that we wanted to build on up like we built back, but we also want to build little culture, because end up the day the thick and define us is going to be kind of like be connected with everything that will exist in in.
00:18:16.890 --> 00:18:26.880
Stani Kulechov: The venture ecosystem and then I think it was two towns well last year 2020 January we practically launched the aba protocol, and since then.
00:18:27.420 --> 00:18:37.710
Stani Kulechov: pretty much from from zero we have grown into a protocol that holds 5 billion worth of value, which is an incredibly unbelievable for for me and the whole team.
00:18:38.190 --> 00:18:39.270
Jeremy Allaire: yeah it's.
00:18:40.320 --> 00:18:41.340
Jeremy Allaire: True truly incredible.
00:18:42.780 --> 00:18:53.430
Jeremy Allaire: So I think for for folks that have been in D Phi and some of the audience on money movement definitely are active market participants have a pretty solid understanding, but.
00:18:53.730 --> 00:18:57.960
Jeremy Allaire: I think one of the cool things that's happening right now like, as we speak, is like.
00:18:58.470 --> 00:19:10.410
Jeremy Allaire: This is like this is cutting getting on the radar of like so many more people and so there's a lot of people who are just like really trying to understand like what is this, what are the implications of this, I actually I just did a media interview.
00:19:10.950 --> 00:19:18.720
Jeremy Allaire: This morning, and it was it was all about this, and it was from like a really mainstream like kind of like payments and banking kind of.
00:19:19.350 --> 00:19:29.520
Jeremy Allaire: You know place and and it was just kind of like, how do you translate this for for people in trad fi or traditional finance and or the lay person and.
00:19:30.270 --> 00:19:37.590
Jeremy Allaire: So, like maybe, just like from your perspective kind of really breaking it down into like basic building blocks.
00:19:38.370 --> 00:19:53.250
Jeremy Allaire: What is defy for borrowing and lending right, and how does that compare to I want to like lend to a bank and get paid something or I want to borrow from a bank like just fundamentals like kind of like.
00:19:54.810 --> 00:19:55.410
Jeremy Allaire: For people.
00:19:56.130 --> 00:20:02.760
Stani Kulechov: yeah I guess probably one of the most interesting part is is ready to deploy kind of like properties, is the fact that.
00:20:03.240 --> 00:20:16.230
Stani Kulechov: The users, has the opportunity to choose not to get custody so as a default user and for me defies is also bitcoin and ethereum it's whatever it's been building into it and which has the centralized governance.
00:20:16.560 --> 00:20:21.870
Stani Kulechov: yeah and and there you can actually choose to actually I don't need I can keep my.
00:20:22.860 --> 00:20:38.400
Stani Kulechov: custody of my funds and they can choose what I will participate in in a permission this fashion or, then I can actually choose a custodian if I actually want to do that and the fight kind of like almost this permission has access to.
00:20:39.960 --> 00:20:49.980
Stani Kulechov: The video much to choose, whatever you want to participate in this ecosystem and by ecosystem, we were talking about whatever is built on a theorem that.
00:20:51.090 --> 00:20:55.740
Stani Kulechov: You can interact with and compared to, for example, traditional finance usually you.
00:20:56.760 --> 00:21:05.850
Stani Kulechov: You basically your customer with a bank you're pretty much using their services and to change your like service providers from one bank to another.
00:21:06.270 --> 00:21:14.550
Stani Kulechov: And and that's that's that's a big hurdle, and also like being able to keep your accounts in one place your funds in one account.
00:21:14.910 --> 00:21:26.580
Stani Kulechov: and participating in something other service providers offerings it's not very like how to say there isn't much of communication and interoperability in place.
00:21:27.000 --> 00:21:35.940
Stani Kulechov: And what the FBI actually does it just takes and makes all of this kind of like infrastructure to communicate with each other so practically.
00:21:36.510 --> 00:21:44.490
Stani Kulechov: Not just that you can practically select whatever you want to use but there's also developers there's thousands of developers practically working every day.
00:21:45.630 --> 00:21:52.680
Stani Kulechov: In Open Source fashion to contribute and create new products and services that actually remove inefficiencies.
00:21:53.010 --> 00:21:58.410
Stani Kulechov: yeah those are like the, the main thing there's, of course, other things are the two what what makes the fi awesome but.
00:21:58.500 --> 00:22:02.880
Stani Kulechov: yeah I guess from traditional finance perspective that's the kind of like an interesting part.
00:22:03.390 --> 00:22:05.910
Jeremy Allaire: yeah yeah totally I think a lot of times.
00:22:07.410 --> 00:22:17.910
Jeremy Allaire: You know people they're looking for analogies to like How is this going to be different, or better a lot of times there's this concept of you know sort of the Internet sort of.
00:22:18.780 --> 00:22:33.540
Jeremy Allaire: can make things 10 X better 100 X better or whatever it is, and I think if, when when one starts to use defy you intuitively I think people grasp that all of those things that you've described just like how radically empowering that is and and efficient.
00:22:35.070 --> 00:22:45.120
Jeremy Allaire: You know a lot of times people don't even realize right that, like we have you know decentralized communications, we have decentralized information sharing, we have decentralized.
00:22:46.050 --> 00:22:58.020
Jeremy Allaire: You know messaging we have decentralized video like and it's a there's semantics right, because in the purest sense like decentralized would be everyone's running up here on a peer to peer network.
00:22:58.380 --> 00:23:02.910
Jeremy Allaire: But like we have you know essentially permission list protocols.
00:23:03.120 --> 00:23:16.110
Jeremy Allaire: That are at a minimum fully distributed that people can connect to and that's like the Internet and so it's like well just think about what the internet's done for how we can share information and data and communicate and connect.
00:23:16.500 --> 00:23:26.250
Jeremy Allaire: it's these these open networks permission those protocols, mostly developed under you know Open Source efforts and open intellectual property and.
00:23:26.820 --> 00:23:30.000
Jeremy Allaire: I kind of call that, like the the inherent DNA of the Internet.
00:23:30.780 --> 00:23:37.800
Jeremy Allaire: it's sort of the law of the universe point that way and it's just taking all those same things that we take for granted and saying well that's what's going to happen with mine.
00:23:38.700 --> 00:23:53.340
Jeremy Allaire: I think one of the things and I talk a lot about like the future of markets, the future of capital markets, you know effectively like Ave is a capital market it's a form of capital market around borrow and lend and.
00:23:54.930 --> 00:24:05.340
Jeremy Allaire: You know, one of the other things that the Internet seems to do really, really well is establish longtail markets, you know effectively enabling.
00:24:06.390 --> 00:24:15.570
Jeremy Allaire: every level of participant in the world to participate in a market, whether that is as a creator a seller a musician.
00:24:16.050 --> 00:24:25.260
Jeremy Allaire: You know, all these incredible platform marketplaces you know sharing economies like another dimension of that as well, but like basically like these, these long tail markets and.
00:24:25.800 --> 00:24:44.670
Jeremy Allaire: I like to think of crypto and defy as enabling like long tail capital more long tail capital markets and i'm curious what you think about the future, I mean we have that with like taxes they're like long tail capital markets like anyone can go, you know concrete create a market.
00:24:45.750 --> 00:24:59.700
Jeremy Allaire: But when you think about things like the core behavior of borrowing and lending there's obviously potentially so many different ways that that can be sliced and diced and surface to people who need to borrow or who need to lend.
00:25:00.630 --> 00:25:08.760
Jeremy Allaire: Do you envision you know Ave and the broader space like continuing to really like diversify out the richness of.
00:25:09.210 --> 00:25:21.390
Jeremy Allaire: of how that can work so that it can service, and not just people who are saying you know pledging crypto to borrow and margin to trade, but like a more regular everyday kinds of borrowing and lending.
00:25:22.080 --> 00:25:31.080
Stani Kulechov: yeah so one of the like really close thing that that has happened happening with the other protocol is that exactly it's it's because it's great it's this kind of like a.
00:25:31.950 --> 00:25:40.380
Stani Kulechov: it's running on this like international finance so so pretty much like well if you have a Internet connection you're pretty much connected into the system.
00:25:40.830 --> 00:25:50.700
Stani Kulechov: In the same kind of like a mindset so anyone can actually get the same meals what the protocol provides so it's kind of like democratizes mainly things so.
00:25:51.570 --> 00:25:59.550
Stani Kulechov: For example, i'm here in London, now I get the same access to the same yield as someone else will get from let's say Brazil.
00:26:00.420 --> 00:26:10.020
Stani Kulechov: You know, Hong Kong, Singapore and so forth, so it's kind of like that's the kind of main element that you actually have this like global markets and pretty much.
00:26:10.680 --> 00:26:26.730
Stani Kulechov: When you deposit to have added say yes DC you get back so called a token so a UCC that a usda say algorithmic it goes in your balance, and that makes it kind of like a usda nominated global savings account in the point in one way.
00:26:26.970 --> 00:26:38.820
Stani Kulechov: yeah and I think it's very, very much something that for what like empowers in many places, because you don't have in all regions, access to USD nominated.
00:26:39.840 --> 00:26:43.380
Stani Kulechov: Perfectly income and that's that has automatic treasury management.
00:26:43.560 --> 00:26:55.410
Jeremy Allaire: yeah it's it's incredible the concept is that you told someone like you have like a savings account, and you can take that savings account and just like give it to someone.
00:26:56.130 --> 00:26:59.970
Jeremy Allaire: You can sell it to them, but you can actually give it to them if you wanted to give it to them as well.
00:27:00.330 --> 00:27:11.520
Jeremy Allaire: And it's just and it continues to be this yield generating savings account you pass it around just like you pass around an MP3 file and whatever and people are like what like that doesn't that doesn't that doesn't sound possible.
00:27:12.570 --> 00:27:19.290
Stani Kulechov: And what's what's cool about this jeremy's is that, like when we look at like traditional US dollar as a kind of a gap payment instrument.
00:27:19.470 --> 00:27:26.490
Stani Kulechov: So just for every time you pay with it practical whoever receives it the value of the USD practically decrease.
00:27:26.760 --> 00:27:27.480
Jeremy Allaire: decreases.
00:27:27.810 --> 00:27:39.120
Stani Kulechov: Because of the patient and here you have like practical payments currency increasing in balance, wherever you're sending it and it's practically backed by UFC UFC see so.
00:27:39.150 --> 00:27:39.360
Jeremy Allaire: yeah.
00:27:39.660 --> 00:27:50.340
Stani Kulechov: it's very interesting, like all of it we don't have any kind of like a we don't put efforts to make it as a payment currency, but we were we're happy to see that this kind of like algorithmic.
00:27:51.120 --> 00:27:59.640
Stani Kulechov: Balance increases can work in even use the sea level or anywhere because it's a nice way to to credit, the value to the.
00:27:59.700 --> 00:28:07.650
Jeremy Allaire: holders yeah now it's brilliant it'll be fascinating to see whether these you know yield generating dollar tokens.
00:28:08.250 --> 00:28:23.190
Jeremy Allaire: Like become you know more common for people transacting with them, just like I don't want that deflationary or that that you know inflationary thing that's going down in value, I only want to accept, you know, a USB C or C USB C or whatever.
00:28:24.270 --> 00:28:24.780
Jeremy Allaire: But uh.
00:28:26.310 --> 00:28:28.440
Jeremy Allaire: it's it's pretty amazing.
00:28:29.820 --> 00:28:36.270
Jeremy Allaire: yeah I think like one of the one of the big things i'm interested in hearing your thoughts on is.
00:28:37.140 --> 00:28:46.440
Jeremy Allaire: You know today right people are are pledging you know collateral to to to borrow right and and they're pledging.
00:28:46.710 --> 00:28:54.150
Jeremy Allaire: You know hard collateral right because it's liquid collateral and it's liquid crap collateral in in the crypto market whether it's like you know, like he.
00:28:54.660 --> 00:29:06.120
Jeremy Allaire: wrapped bitcoin us DC you know die, and so on, right So these are, in some ways, like the hardest assets that there are because they're the digital bear instruments, and you know you can.
00:29:06.840 --> 00:29:14.100
Jeremy Allaire: You know that's that's why people are comfortable with this and, in many ways right it's not some fuzzy thing where there's like this legal agreement and you don't really know what's.
00:29:14.100 --> 00:29:14.820
Jeremy Allaire: going to happen.
00:29:15.150 --> 00:29:21.900
Jeremy Allaire: But they clearly a lot of this becomes like really interesting when the real world.
00:29:23.400 --> 00:29:33.180
Jeremy Allaire: becomes token and when these protocols can surface value for people against the real world.
00:29:34.620 --> 00:29:41.730
Jeremy Allaire: And, and I wonder how we get there, I mean we were talking last night about tokens equities, and like Sam is like these doing it.
00:29:43.170 --> 00:29:46.410
Jeremy Allaire: And they're gonna be a lot of other people that do it, too, and I think they're going to be people in the US and.
00:29:46.920 --> 00:29:53.940
Jeremy Allaire: And so that'll that'll be a view into that, and you know I know of just from our own where are like you know token ised.
00:29:54.270 --> 00:30:00.930
Jeremy Allaire: fun products that are that are quite significant and scale that will go on chain and people be able to you know.
00:30:01.260 --> 00:30:12.600
Jeremy Allaire: The people who could never access like etfs or certain types of funds, like will be able to access those you know, with just a crypto wallet anywhere in the world it's really powerful, but what about like.
00:30:13.110 --> 00:30:33.450
Jeremy Allaire: Other things I think part of the idea of of token ization is that you know the value of so many other things in the world can be represented on chain and then can people can not just exchange it, but that they can actually borrow against it, or lens to those that wanted.
00:30:34.740 --> 00:30:36.090
Jeremy Allaire: How do you think that evolves.
00:30:37.050 --> 00:30:45.720
Stani Kulechov: yeah so I guess like what we see now quite a lot is practically organizations and something that is fungible, for example, like US dollars are very.
00:30:46.530 --> 00:30:55.170
Stani Kulechov: good thing that has happened recently in terms of like urbanization and that's that's one of the most you one of the most used collateral so even in.
00:30:55.170 --> 00:31:09.420
Stani Kulechov: Java and but there's like little value related to two things that are less tangible action on conjugal properties there's there's value in creating money there's everywhere value, and I think like what.
00:31:10.170 --> 00:31:18.060
Stani Kulechov: Like we definitely will see this value transform at some point, and have this kind of like a cryptographic you know representation.
00:31:18.150 --> 00:31:19.020
Stani Kulechov: yeah but like.
00:31:20.190 --> 00:31:21.060
Stani Kulechov: For example, what.
00:31:22.140 --> 00:31:29.250
Stani Kulechov: yeah what's a circle has done pretty well, is that you guys have taken like one particular thing and token, is it the organizing it very well.
00:31:29.580 --> 00:31:35.640
Stani Kulechov: And when we're looking like let's say the organization of real value real estate and whatnot we try to kind of like solve.
00:31:36.030 --> 00:31:43.710
Stani Kulechov: The issue too widely so so I guess like the solution will be that we try to token I something very locally.
00:31:44.220 --> 00:31:57.840
Stani Kulechov: winter in September, whether it's it's committed days or yeah real estate and try not to kind of achieve it in a global scale, yet and try to move like step by step, in that sense, but I think the value is coming and.
00:31:58.440 --> 00:32:13.350
Stani Kulechov: I guess, one of the coolest thing I am been now following quite a lot is practically the Labor market on change so so things like, for example, get coin, that you can actually you actually don't need stable points to.
00:32:13.380 --> 00:32:17.130
Stani Kulechov: or let's say you had a garden seeds to get disabled points and on board.
00:32:18.660 --> 00:32:18.900
Jeremy Allaire: You could.
00:32:18.930 --> 00:32:24.030
Stani Kulechov: Work and get stable coins, for example, and this kind of new onboarding mechanism, I think it's very.
00:32:24.810 --> 00:32:32.490
Stani Kulechov: Valuable but I guess like in terms of like token ization that's something that's probably will probably is quite a lot now in during this year.
00:32:33.060 --> 00:32:39.930
Stani Kulechov: But it was it comes like like one of the things what's important about the fights that we get the liquidity back into traditional finance so.
00:32:40.500 --> 00:32:46.500
Stani Kulechov: Currently we have liquidity kind of like a crunch, that we need more liquidity to define but at some point we need to get that liquidity.
00:32:46.800 --> 00:32:56.820
Stani Kulechov: back into where basically people are doing also business that's where we in our we have this great delegation mechanism where were you, you know you can whitelist some of the.
00:32:57.600 --> 00:33:02.490
Stani Kulechov: are worse, for example, might be institutions or whatnot might be from traditional finance.
00:33:02.790 --> 00:33:14.940
Stani Kulechov: And the depositors could delegate that are created lines, so when they deposit to all the day they earned but they might not exercise the credit line so they delegate to them, and they are practically financing their businesses and businesses in.
00:33:15.300 --> 00:33:21.990
Stani Kulechov: In traditional finance and consumers so end of the day, like we might end up in a situation that where someone buys a house or a car.
00:33:22.260 --> 00:33:24.060
Stani Kulechov: That what did they comes from the fly.
00:33:24.600 --> 00:33:38.010
Jeremy Allaire: yeah that's exactly where I am excited about you know is is sort of delegating out those market functions into defy protocols themselves, creating this kind of Meta structures to make that possible.
00:33:39.390 --> 00:33:51.660
Jeremy Allaire: it's um yeah it's interesting I mean you know I think yeah we us DC like there is this kind of assurance layer there's a governance layer people understand like.
00:33:52.200 --> 00:34:09.690
Jeremy Allaire: You know circle is bound by like law and we're you know there's regulators, making sure like we don't you know off with reserves or or or that we don't we may maintain the before reserves and so that that certainly provides trust.
00:34:10.770 --> 00:34:23.100
Jeremy Allaire: But yeah something like a house or a car or you know I like to think about you know if there become more seamless ways to like to organize everyday objects, like in a community.
00:34:24.120 --> 00:34:31.110
Jeremy Allaire: took an eyes, you know the snowblower either before there's a lot of snow, but like someone has a snowblower and it can be a Community object.
00:34:32.220 --> 00:34:32.490
Jeremy Allaire: You know.
00:34:33.120 --> 00:34:38.580
Jeremy Allaire: Basically yeah public good, and you can transact on it and i'm not sure if you've looked at ours or.
00:34:40.380 --> 00:34:53.370
Jeremy Allaire: yeah I mean it's it's it's really it's a really powerful concept and it sort of fuses you know real world objects with token ization as non fungible tokens that.
00:34:54.390 --> 00:35:01.170
Jeremy Allaire: Ownership can pass between people and then they're they're sort of redeemable and what allosaurus doing is.
00:35:01.590 --> 00:35:09.420
Jeremy Allaire: they're creating the assurance market so that market participants know like sort of like with eBay in the early days like.
00:35:09.720 --> 00:35:23.610
Jeremy Allaire: How do I know like i'm going to get my beanie babies, how do I know you're not a fraudster right, so the assurance layers really, really key moving assurance models risk and reputation models on chain as well, can be very, very significant.
00:35:24.750 --> 00:35:25.590
Jeremy Allaire: To this kind of.
00:35:26.850 --> 00:35:36.300
Stani Kulechov: Our story is pretty pretty fascinating company could say I mean it's like I kind of see you know something like you have that today, like it see so creators can actually do different kinds of.
00:35:38.550 --> 00:35:39.390
Stani Kulechov: Physical object.
00:35:40.590 --> 00:35:46.830
Stani Kulechov: And pretty much it organized so much value, and you can talk and as before, the object even practical system.
00:35:47.700 --> 00:35:49.080
Stani Kulechov: Right theory.
00:35:49.560 --> 00:36:04.020
Jeremy Allaire: yeah they're doing that i'm like there's people are saying, like I here's the design for something I want to make a little bit of a what was the crowdfunding site that people would make things for it still exists, I forget what it's called.
00:36:05.310 --> 00:36:07.500
Jeremy Allaire: smarter right kickstarter kickstarter right.
00:36:07.530 --> 00:36:18.360
Jeremy Allaire: yeah yeah so there's a little bit of that which is like you know i'm going to make these like this limited edition like really cool designer jeans i'm going to figure out how to make them.
00:36:18.870 --> 00:36:32.220
Jeremy Allaire: And i'm going to make 20 of them, and you can buy you know there it is, and you can you can basically pay for them and then you'll you'll get them and and and it's creating a scarcity, you know desirable object.
00:36:32.520 --> 00:36:33.300
Jeremy Allaire: That is.
00:36:33.360 --> 00:36:35.340
Jeremy Allaire: tradable on chain as well.
00:36:35.610 --> 00:36:42.870
Stani Kulechov: You know what's the cool part like this allows actually more people to create things unless things so you don't need to create that say.
00:36:43.200 --> 00:36:51.690
Stani Kulechov: Hundreds of thousands of features that are looking the same you can create just less, and you know people want that you know it creates more brands and.
00:36:51.690 --> 00:36:52.140
Jeremy Allaire: brands.
00:36:52.230 --> 00:36:57.390
Stani Kulechov: With like creators as well, like it's it's really, really empowering.
00:36:57.810 --> 00:37:10.500
Jeremy Allaire: yeah yeah, and this is a little bit of what I was getting to earlier, which is like the internet's really great at longtail markets, and if we can actually move the marketplace and the role of the marketplace.
00:37:11.160 --> 00:37:28.980
Jeremy Allaire: On chain, and we can and we can bring you know forms of identity and reputation and and that assurance layer that you know used to require like big intermediaries like eBay or or you know or Amazon or alibaba and you can have that, beyond chain.
00:37:30.060 --> 00:37:49.200
Jeremy Allaire: And you have like Labor markets token eyes, so that you know you have this token ization of work and all that can happen through these efficient protocols it's like this new substrate for organizing Labor output economic coordination and actually making things for people that are useful.
00:37:50.370 --> 00:37:51.450
Jeremy Allaire: Trading value right.
00:37:52.590 --> 00:38:08.070
Stani Kulechov: And cool part about, that is, you know kind of like what I will see probably we already see that there's developers working in multiple protocols and you know in collaborating quite a lot, so you can have actually like with open source and with this like ownership economic.
00:38:08.100 --> 00:38:15.840
Stani Kulechov: You actually can choose who you work with and what you work upon, and I think that's that's something that if it starts to scale.
00:38:16.620 --> 00:38:19.050
Stani Kulechov: It might be quite quite interesting like.
00:38:20.010 --> 00:38:24.180
Jeremy Allaire: yeah but that's I mean that's one of the things I wanted to talk to you about to was.
00:38:25.200 --> 00:38:38.580
Jeremy Allaire: You know your Community govern you have a governance token, and so you know again just for the for the people who are new to this right have a protocol it's not a company.
00:38:40.080 --> 00:38:47.250
Jeremy Allaire: it's actually just this this machine that exists on the Internet that's immutable it's just this machine that that.
00:38:47.760 --> 00:38:59.310
Jeremy Allaire: provides this function as a public good to to the world, it has some intrinsic economics and it, it also coordinates work and coordinates decisions through the governance token.
00:39:00.570 --> 00:39:13.470
Jeremy Allaire: You know how does how's that working like today, in practice, just in terms of coordinating work coordinating decisions, improving things like that.
00:39:14.250 --> 00:39:24.150
Stani Kulechov: yeah it's quite interesting because, like it's something that we haven't be used to because, like i've been has been known like that we have very high rate of innovation and we can practically.
00:39:24.990 --> 00:39:35.310
Stani Kulechov: Development ship very secure code and with a lot of innovation and now kind of like the with the governance and everything it's it's completely different because you know if you want to.
00:39:36.000 --> 00:39:47.010
Stani Kulechov: build something or someone proposes in the Community, it has to go to this layer of governance, where everyone can actually look at the the brainstorm.
00:39:47.670 --> 00:39:57.390
Stani Kulechov: get involved in I think At first it was a bit of like it felt a bit burdensome but as people started to get more involved actually I understood.
00:39:58.080 --> 00:40:10.680
Stani Kulechov: In that particular moment that you know the problem with the decentralized governance is one of the best kind of like a mechanisms of the on chain ecosystem and what's smart contracts are providing.
00:40:11.040 --> 00:40:19.500
Stani Kulechov: and practically anyone actually could go and make a proposal to the doubt that hey I want to build something cool or I have a cool idea.
00:40:19.830 --> 00:40:37.680
Stani Kulechov: and probably will close like this amount of funds going to get a grant and some of the ideas are absolutely amazing like we do a lot of engineering like economical, you know technical implementations but the amount of people there are in the Community, with different ideas it's just.
00:40:39.660 --> 00:40:49.980
Stani Kulechov: it's it's amazing actually and I think like we're not we're now in the state where we actually are kind of like trying to organize a bit more.
00:40:50.460 --> 00:40:57.720
Stani Kulechov: Dev work so that is the governance is more inclusive that anyone can come and just start to ask.
00:40:58.410 --> 00:41:06.930
Stani Kulechov: Grants whatever they want to build so it's a process that takes a little time because they in all that the building the Community to guess roughly like over.
00:41:07.650 --> 00:41:17.010
Stani Kulechov: 40 years or so, so all of the all of the kind of like a success in Community wise and and and branding it's it's actually something that's compounded over years.
00:41:17.280 --> 00:41:20.250
Stani Kulechov: And the same thing will be with the governance, I think the.
00:41:20.280 --> 00:41:28.650
Stani Kulechov: Other governance will look good in five to 10 years from now, and then it will be kind of like very interesting to see like how it will function and.
00:41:29.070 --> 00:41:36.600
Stani Kulechov: One one interesting thing I want to add to here is that when it isn't recently launched the version two of the governance which allows not only.
00:41:37.290 --> 00:41:42.990
Stani Kulechov: delegating voting power, but that again the actual proposition power, and we see like position power.
00:41:43.950 --> 00:41:52.320
Stani Kulechov: In a way, that whenever you want to make a proposal on chain, you have to put it on chain and if there's positive outcome of the boat that.
00:41:52.770 --> 00:42:02.070
Stani Kulechov: code will be executed on chain so practically proposition power is a way of other other token holders to actually choose the code makers the lawmakers.
00:42:02.310 --> 00:42:12.450
Stani Kulechov: or whatever is the terminology and then that are getting voting power is how you could actually choose the political politicians, unless you want to keep those powers to yourself.
00:42:12.900 --> 00:42:21.000
Stani Kulechov: And this kind of like creates actually interesting element, because the code makers are competing of creating good proposals, and when we look at that say.
00:42:21.270 --> 00:42:31.110
Stani Kulechov: How governments work, you know you have a government that makes the proposals and you either both yes or no, but now you have an element of competing kind of like proposals that are going on chain.
00:42:31.380 --> 00:42:39.030
Stani Kulechov: And and that's like very fascinating quite and because the strategies like get have started using in the governance, it means that.
00:42:39.570 --> 00:42:47.910
Stani Kulechov: We can create a new market were not just have a token has voting power but let's say if there's assets such as eunice for liquidity shares as collateral.
00:42:48.150 --> 00:43:00.690
Stani Kulechov: same from associated balancer you can you can basically give voting power to uni you can keep voting power to bow sushi tokens and make more inclusive governance and I think that's The next step in the fight that.
00:43:01.830 --> 00:43:10.680
Stani Kulechov: Everyone everything becomes a bit more Amish everyone works together and multiple things and also kind of a govern commonly all of the like main protocols.
00:43:10.980 --> 00:43:11.280
00:43:12.330 --> 00:43:29.490
Jeremy Allaire: It is, I think the greatest laboratory in the world for for the future of coordination and and economic coordination and and and work coordination it's just so so exciting from that perspective.
00:43:30.630 --> 00:43:35.580
Jeremy Allaire: yeah the just building on that and tying back to some of the other things, we talked about.
00:43:36.930 --> 00:43:42.570
Jeremy Allaire: You know i'm really excited about experimentation in you know these new types of.
00:43:44.040 --> 00:43:56.670
Jeremy Allaire: I call them corporate forms but basically like we had joint stock corporations and now we have dow's is it isn't really genuine new form of kind of corporate organization.
00:43:57.330 --> 00:44:17.700
Jeremy Allaire: But effectively we're we're for the first time we have a substrate that's global that allows for the creation of organizations that can where anyone in the world can participate economically anyone can participate in various forms of stake holding.
00:44:19.080 --> 00:44:28.980
Jeremy Allaire: And and and where you have the ability to structure really innovative forms of decision making, and when you think about what a corporation is right it's.
00:44:29.580 --> 00:44:35.010
Jeremy Allaire: it's a it's a token that has certain privileges it's a Treasury.
00:44:35.880 --> 00:44:48.390
Jeremy Allaire: That the that token basically governs what happens with that Treasury and then it's this nexus of contracts, they be you know between you know, there are entities and individuals that are are interacting with that.
00:44:48.930 --> 00:45:01.410
Jeremy Allaire: entity and there's such that this enormous edifice of of you know, legal, political, economic infrastructure to to kind of support that.
00:45:01.860 --> 00:45:17.190
Jeremy Allaire: And now we're radically simplifying it and, in many ways, and you know I think one of the one of the things i'm just i'm most excited about is to see what kinds of new new corporate forms are created and.
00:45:18.360 --> 00:45:25.110
Jeremy Allaire: I think one of the biggest questions for our industry is, you know how will governments treat these things you know.
00:45:26.460 --> 00:45:37.860
Jeremy Allaire: You know, when that sort of in a very free market way right i've created this thing there's you know, potentially, thousands of people involved in it and it's it's creating things is creating value.
00:45:38.790 --> 00:45:45.120
Jeremy Allaire: anyone's interacting with it, you know, like what what is that can you tax that thing like.
00:45:46.110 --> 00:45:50.850
Jeremy Allaire: To the individual subject to their local tax laws like what the heck what the heck is it so.
00:45:51.570 --> 00:45:59.250
Jeremy Allaire: Do you think, given your background, you were studying law and contracts before this do you think this is like.
00:46:00.090 --> 00:46:07.710
Jeremy Allaire: going to require fundamental rethinking of corporate law, basically, is it going to become you know.
00:46:08.640 --> 00:46:16.770
Jeremy Allaire: Like Internet law is like a different kind of law like what what, what do you see happening there, I think about this a lot you're looking at.
00:46:17.430 --> 00:46:36.870
Jeremy Allaire: Projects like Claire rose open law, you know things that are trying to figure out how to intermediate some of that but, but like at the end of the day, right we live in these places that have armies and and like an have taxes and like we you know we, we have to worry about that.
00:46:37.650 --> 00:46:49.590
Stani Kulechov: yeah exactly I mean there's war, you know, and I I guess i've been thinking this quite a lot so so I mean it's been all my time thinking everything that I do and.
00:46:51.270 --> 00:46:56.160
Stani Kulechov: stuff but there's like I think there's two paths like one path we just tried to figure out like.
00:46:56.700 --> 00:47:04.650
Stani Kulechov: Like how on track actually what's happening here which we could kind of like see that when people come together and they choose to.
00:47:05.280 --> 00:47:19.590
Stani Kulechov: Use software to manage their relations it's kind of like something that might be contractual like contractual law contractual agreement of like joint efforts and that's what what many of the.
00:47:21.480 --> 00:47:28.590
Stani Kulechov: Corporate forums are, but they also have this strategy provisions that in some cases, give them practically.
00:47:29.670 --> 00:47:30.870
Stani Kulechov: limited liability.
00:47:30.930 --> 00:47:31.350
Jeremy Allaire: Which is.
00:47:31.560 --> 00:47:40.920
Stani Kulechov: One of the key components and and it's only based on contractual relationship, you can limit this liability against your counterparts in this.
00:47:41.550 --> 00:47:51.510
Stani Kulechov: kind of like a group, but then there's the third party creditor liability that you might not have the same effect as a state Senator law that gives.
00:47:51.720 --> 00:48:03.270
Stani Kulechov: me like that, and I think that will be one way to just like draw simple conclusions, but I don't think like that that will make that much sense compared to actually like trying to rethink what we have now.
00:48:04.080 --> 00:48:10.140
Stani Kulechov: Frankly, frankly kind of like thinking like actually what we have here goes beyond like like beyond what we are.
00:48:10.260 --> 00:48:11.610
Stani Kulechov: taught, just like.
00:48:12.720 --> 00:48:13.920
Jeremy Allaire: Talking about like like.
00:48:14.220 --> 00:48:27.720
Jeremy Allaire: leveraging the multiple governance tokens to like this, this nexus of these these units of work organization that are connected to each other in these really ways like what's that like.
00:48:28.890 --> 00:48:30.720
Jeremy Allaire: They can't do that very easily.
00:48:31.260 --> 00:48:40.110
Stani Kulechov: yeah I mean imagine this like like in all the doll like we have like we are quite a lot of like basically participants and like.
00:48:40.440 --> 00:48:52.800
Stani Kulechov: Globally, like it allows you to organize and decide on things, transparently and you know the result will execute you know it's just why not, we were we can't have this kind of like governance everywhere.
00:48:53.460 --> 00:48:55.590
Stani Kulechov: basis, like as a human fight like there's.
00:48:55.650 --> 00:48:56.910
Jeremy Allaire: Totally totally.
00:48:58.500 --> 00:49:15.570
Jeremy Allaire: yeah well I i'm hopeful that, like you know I mean you're you're you're running a grand experiment and it's just awesome and and like it, this is in the spirit of open source it's just like iterate and learn improve new proposals new design.
00:49:17.070 --> 00:49:27.960
Jeremy Allaire: And it just moves in such a powerful fast pace and i'm really excited about you know projects that are working on making creation of these types of.
00:49:29.190 --> 00:49:47.340
Jeremy Allaire: Organizations you know much, much easier for for for for people like I can imagine like like the Google Apps of dads and like that's just like you know I know like it going with this, I know, Aragon was sort of in that spirit.
00:49:48.330 --> 00:49:59.130
Jeremy Allaire: As well and but it, you know it feels like we're still early there and most you know, most people aren't like how do I start one of these, but there's a lot more people who want to start Nice.
00:49:59.940 --> 00:50:07.680
Stani Kulechov: A lot a lot and what's interesting that article was, I mean they were very early in like Dallas was one of the first use cases so.
00:50:08.550 --> 00:50:19.290
Stani Kulechov: On in what you can build on a video and the governance and kind of like the development there's been a lot of interesting stuff, there is the model del mar go, has done some interesting work.
00:50:19.770 --> 00:50:27.000
Stani Kulechov: You know compound has been very nice governance, we innovated on governance as well, a bait and and I guess like there will be more models.
00:50:27.630 --> 00:50:43.230
Stani Kulechov: But still, like, I think this is something that requires quite a lot of more innovation there's still like because, like one model doesn't fit for everyone, and I think, as we we might be able to experiment more various type of governance is that makes it very.
00:50:44.340 --> 00:50:53.220
Stani Kulechov: interesting because then I see kind of like the on chain ecosystem, where where we can you know it's a big sandbox so you can do a lot of things there's also things that you.
00:50:53.610 --> 00:50:57.600
Stani Kulechov: You can play around when you have a lot of value in big protocols, but when you are actually.
00:50:58.320 --> 00:51:07.620
Stani Kulechov: Creating something that you are trying to test and and and and you know see how how it works and dollars, is exactly where you should do and.
00:51:07.890 --> 00:51:19.890
Stani Kulechov: Those can be you know it doesn't have to govern finance only can cover the nfp consistent gaming and so forth in gaming is actually a place where we should kind of like a use it as a more of a sandbox and.
00:51:20.910 --> 00:51:25.050
Stani Kulechov: How the social interactions go there and and what you could actually use in finance even.
00:51:25.320 --> 00:51:27.300
Jeremy Allaire: yeah yeah yeah absolutely.
00:51:28.590 --> 00:51:29.400
Jeremy Allaire: Very cool.
00:51:30.510 --> 00:51:36.510
Jeremy Allaire: Well awesome, this is a great just a great discussion and super super pleased we can do this today.
00:51:37.980 --> 00:51:43.710
Jeremy Allaire: lot of love the work that you're doing and yeah let's say to just keep collaborating and building.
00:51:44.520 --> 00:51:47.040
Stani Kulechov: yeah it was very fun thanks for having me here, Jeremy.
00:51:47.490 --> 00:51:50.280
Jeremy Allaire: yeah you're welcome alright see you next time.
00:51:50.730 --> 00:51:51.180
Stani Kulechov: Thank you.
00:51:51.450 --> 00:51:52.530
Jeremy Allaire: cheers cheers bye bye.
00:51:56.820 --> 00:52:17.790
Jeremy Allaire: Really enjoyable discussion there with donnie and just continuing to explore this new substrate that is forming this new global economic system in front of us at an incredible pace very exciting will look forward to our next episode until then stay well stay safe and stay informed.