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Stani Kulechov, the founder of the decentralized finance (DeFi) protocol Aave, highlighted several issues within the DeFi space at the StarkWare Sessions 2023, held at The Cameri Theatre in Tel Aviv, Israel.
In a talk titled "Challenge: Resilience to Global Uncertainty", kulechov and co-telegraph editor Alex Cohen discussed different subjects, including the risks of challenge versus traditional (traditional) finance and how stablecoins can lead to greater adoption of challenge.
According to Kulechov, the preciseness of quantifying risks in DeFi is better than TradFi products, which could push further space adoption. The founder of aave explained that operating in challenge would become less expensive than traditional since risks are more easily identified. He said:
“You have all this visibility, you can actually quantify the risk more precisely which should mean that then you’re operating in an environment where it should be cheaper for you because the risks are more known.”
When asked about the integration of ordinary people who are perhaps not so "technophiles" into the challenge space, Kulechov noted that stability and payments could play an important role. According to the executive aave, the construction of the "payment layer," which implies stablecoins, can potentially hang ordinary people in space, finally introducing them into challenge.
"It's more about building that layer of payment, and then the entire challenge loop starts to close because you have a way to trade value easily," he said. Furthermore, kulechov also noted that pushing the innovation curve further can further inhibit uptake.
However, the executive also recognised several problems in the area of sustainable development, including the value in the ecosystem and the collateralisation of decentralised sustainable development. Kulechov explained that:
“The current issue is that there is not enough value in the ecosystem that you just have less backing in decentralized stablecoins compared with centralized. And I think that's where we have a major issue right now."
The founder of Aave went on to say that the stablecoins, which he described as the "most resistant", were overpolluted.
Related: DeFi enjoys prolific start to 2023: DappRadar report
When asked if challenge was going to become a fashionable word in the near future, the founder of the Aave protocol expressed his confidence in the space that has been there for a long time. He said:
“DeFi will be around for quite a long time because it solves one of the first problems that blockchain has been solving. And this is an infrastructure that will be used across multiple applications."
The founder pointed out that there are a lot of new innovations in space, even finding their place in non-financial apps.
