{"id":19602,"date":"2023-02-06T04:54:51","date_gmt":"2023-02-06T12:54:51","guid":{"rendered":"https:\/\/coinnetworknews.com\/stablecoin-adoption-could-lead-to-defi-growth-says-aave-founder\/"},"modified":"2023-02-06T04:54:51","modified_gmt":"2023-02-06T12:54:51","slug":"stablecoin-adoption-could-lead-to-defi-growth-says-aave-founder","status":"publish","type":"post","link":"https:\/\/coinnetworknews.com\/stablecoin-adoption-could-lead-to-defi-growth-says-aave-founder\/","title":{"rendered":"Stablecoin adoption could lead to DeFi growth, says Aave founder"},"content":{"rendered":"
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Stani Kulechov<\/a>, the founder of the decentralized finance (DeFi)<\/a> protocol Aave, highlighted several issues within the DeFi space at the StarkWare Sessions 2023, held at The Cameri Theatre in Tel Aviv, Israel.\u00a0<\/p>\n

In a fireside chat titled \u201cDeFi: Resilience in the Face of Global Uncertainty,\u201d Kulechov and Cointelegraph\u2019s managing editor Alex Cohen discussed various topics, including DeFi\u2019s risks compared to traditional finance (TradFi) and how stablecoins can lead to more DeFi adoption.<\/p>\n

Fireside chat with Aave founder Stani Kulechov and Cointelegraph managing editor Alex Cohen at the StarkWare Sessions 2023<\/em><\/figcaption><\/figure>\n

According to Kulechov, the preciseness of quantifying risks in DeFi is better than TradFi products, which could push further space adoption. The Aave founder explained that operating in DeFi would become cheaper than TradFi as the risks are identified more easily. He said:\u00a0<\/p>\n

\u201cYou have all this visibility, you can actually quantify the risk more precisely which should mean that then you\u2019re operating in an environment where it should be cheaper for you because the risks are more known.\u201d <\/p><\/blockquote>\n

When asked about onboarding regular people who may not be as \u201ctech-savvy\u201d into the DeFi space, Kulechov noted that stablecoins and payments could play an important role. According to the Aave executive, building the \u201cpayment layer,\u201d which involves stablecoins, can potentially hook regular people into the space, eventually introducing them into DeFi. <\/p>\n

\u201cIt\u2019s more about building that payment layer, and then the whole DeFi loop starts to close because you have a way to exchange value easily,\u201d he said. In addition, Kulechov also noted that pushing the innovation curve further can break more adoption. <\/p>\n

However, the Aave executive also recognized several issues within the stablecoins space, including the value within the ecosystem and the collateralization of decentralized stablecoins. Kulechov explained that: <\/p>\n

\u201cThe 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\u2019s where we have kind of like a big problem at the moment.\u201d<\/p><\/blockquote>\n

The Aave founder added that the stablecoins, which he described as the \u201cmost resilient ones,\u201d are overcollateralized. <\/p>\n

Related: <\/em><\/strong>DeFi enjoys prolific start to 2023: DappRadar report<\/em><\/strong><\/a><\/p>\n

When asked about DeFi becoming more of a buzzword in the near future, the Aave protocol founder expressed confidence in the space being around for a long time. He said: <\/p>\n

\u201cDeFi will be around for quite a long time because it solves one of the first problems that blockchain has been solving. And, it\u2019s an infrastructure that\u2019s going to be used in many applications.\u201d<\/p><\/blockquote>\n

The founder highlighted that there are many new innovations in the space, even finding their way into non-financial applications. <\/p>\n