HK Blockchain Week 2020 - Keynote Speech by Stani Kulechov (Founder & CEO, AAVE)

Define has been the hottest Topic in 2020, but what is it really like to hear? One of my name is Sammy kirchhoff. And I'm the CEO and founder of oven. So I practically have a decent money market protocol and Busy today in the Hong Kong location week, where we going to talk about defy and the topic is the music 95 with, with Arbor Pro call. So to jdi stats, as you will, notify has been pretty interesting subject this year, and it brings a lot of value for the users, with me different kinds of property site and custodial

in, and also bringing transparency in in financial transactions. So we we going to go today a bit about Define in, and how are they is, one of the flagship projects in defy and helps user. Take that kind of control of their financial integrity So in essence of it is a money market protocol and what this means for everything user is that you can deposit into and practically interest on partio, stablecoins and cryptographic assets. So as a protocol practically means that it's a set of smart contracts where we can create such as a in in terms of the

other Governors can create new markets where you have different kind of assets there. As reserves in each markets and Reserve have different kinds of interest rates which basically depends on the utilization of of that particular asset and typical example, is that the users are coming to all them to deposit, stablecoin such as Eeyore, use DC in and they are an interest. And on the other side then have bore words were, And I'm pouring their their assets that they want soda

in practice. They deposit a a, a currency that they're earning, and then they can burrow in. And then we have this functionality called flash phones. I will go more deeper into that. I'll be later in this presentation. The interesting part about the college stats, these are the reserves which means that there's always more liquidity available than then. There's poor old, which means that if you, if you deposit into Arbor. Now, you can also withdraw on the next block, or tomorrow or day after tomorrow, because Thursday excess liquidity in.

Also, every deposit gives you a interest-bearing a token. And I will go a bit more on that during this presentation, The protocol itself has seen substantial growth during during this year, so we we we launched the protocol in in, in January and and since now we have roughly 20,000 users, which is pretty impressive because the device space decent was finest itself as being pretty small in the sense that probably Rusty one year ago. The whole Space was 20000 users in total

because it's way smaller and and now it has grown quite substantially. And many of the users at a table, a pretty much They're using the the protocol because it gives them no custodial access to interest rates and an at the same time, they practically see what's happening at the market because all the transactions are in the public auction. So it is, it's actually quite interesting, the sense that all interactions there, they are practically cut conducted on

Shane. So so so pretty much you can change the code by yourself, so there's no Central Authority in the protocol. And meaning of the, the users are actually depositors. So we have more people, actually, depositing and and and and then a small amount of a segment that is boring as well. And then we have flash, Sony PlayStation. So beginning of the year, we had over half a billion worth of flash phones. Consume from the from to put a call into each and every flash phone practically gives more interest rate

for the depositors and fast phone is practically one that boring without collateral. And I will go with that in in in a in 2 minutes, 1 billion. Gal you locked in the the protocol smart contract is pretty much means that that amount can be Borrowed by by anyone. When when they said of collateral or Flash Coral, that liquidity and interesting here, is that the volume up as a metric is a metric. Indie party where its measured practically, how much people are trusting. The verticals smart contracts nnn it's it's it's been going quite substantially. Given how

young the the the protocol is And as we see there's different kinds of reserve and then this money market. So this is the main author of it money market with separate kind of farm reserves with with their own currencies in. And we can see that each of the currency that you can deposit has a different kind of a deposit rate. So for example we might we have we have in this picture. By 2.35 per cent and and we have to USD see 1.69 + 83 the pens on the consumed

security. So security has consumed the the higher, the interest rates are going which again attracts more Capital into the protocol, which lowers the interest rates. So the rates are actually balanced by supply and demand. We didn't eat the protocol, and yeah, we have this functionality or feature called a tokens. Now, a tokens are sparing tokens. So when you deposit into the protocol, let's say, time, are you getting returned a die? So when I die equals

108, I and once you receive this stuff like that deposit, receipt received your balance will start to grow algorithmically in your address. So it's kind of a new way of Distributing, crediting balances without spending gas cost in in creating those transactions in what is an Essence? If it's the end user permission to savings account, in the sense that it's, it's most of the stable points as they are USD nominated practically. when you holds a die or a Tuesday, C or a Tuesday T, pretty much are holding a

AAA toll USD. And also it it rolls in balance as as as you get more interest rate from the protocol and this is pretty cool. In the sense that if you are in a country where the local currency has a lot of inflation or you going to have access to USD saving savings account, because of the lack of opportunities. For the banking system doesn't offer for various reasons. This is actually pretty nice way to get access to those funds, and it's also means practically that it's already met

Kelly automated treasury management because you don't have to worry about the treasury. It is basically will a generator yield for you and if you sent a UCC for example, to you to another person, it still continues to increase in in in value. So it's actually pretty interesting. In the car and see because normally, when you pay, let's say with your card or cash USD, what happens to start the value of the USDA, periodically, the clients. And, in this case, whatever you sent to someone a Tuesday, see

they will receive the, the, the balance and the bus continues to grow. So, that's for the whole thing in a Precinct 3 director interest rate, which, which basically means that if you want to give the interest rate to, to a charity or to your friend, that is also possible. Clash of Clans is pretty cool feature. So it allows users to borrow one hundred percent under collateralized loans from the protocol. So normally all of the evil ending is over collateralized music that you deposit into our one I said and

then you can you have a credit line to borrow and addresses in a flash mode allows you to do? You actually borrow Ubiquiti. So up to bring some for 1 billion that we have now. It looked into smart contracts but only for one ethereum transaction. So it's a practically. What's what is what what does this mean is that The use cases that you can do. For example, is arbitrage. So you can borrow from Auburn and buy an asset in one exchange and sell it in our Exchange in and keep the profits and return the phone back to Albany or you might have a refinance

application for the end-users, we're pretty simple. If you have a burrow position in underlining protocol or even in in Auburn, what happens is that if it's at say hi and usdgc cheaper, you could actually swap your diet to use these and get lower interest rate. As a border War without repaying, the loan, and then this is pretty cool because you don't have to come back back and refinance by yourself in a situation where you have already spent. So, in many other features

you can do like, what I'll swap. So, in one sense of this, kind of like a developer feature. Do you to create new, so-called mommy Lego products in indecent as fine as decent as finances? Interoperable systems? So, for example, if you think about the space, you create a smart contracts, a deployed them into the internal Network pretty much anyone can interact with them. And most of the defy stuff is pretty much fine and so people can actually create new products on top of other products. And this is how we

call Money Legos in in this impasse Finance in. This is practically a tool that is heavily used in this spaceship. Products and services for end-users, just in, in a few months, 9 months, actually that I am in Alba and the bottlemen Williams is going quite a lot. So many liquidation pallets that are liquidating long positions in Barrio, Steve Urkel's are practically using the auto flash phones and they generate also nice amount of interest for the depositors wall. And one cool new feature is that we have so-called credit application. So what we practically noticed that

many depositors that are you already yelled at? They pretty much number. Oh, did the burrowing consumption is roughly 25%. So the credit education allows them to you delegate dick, their credit you to others and and who can actually draw decorative laundry out of them for their own use and deposit or staying practical or more, because the alligators are paying them more for that. Kind of like an extra margin and you can practically delegate to someone you trust. It can be your friend or some traitor or,

you know, some kind of an entity that that basically is in need for credit to be a different functions that it can do. So there is no credit risk in prison for wires. A link Walt has free delegation and they're boring roughly 20 million worth of us DC from all baby. Colorado. In inches is like very, very cool. Yeah, that's part of the representation want to talk about mention couple words about abenomics because it's a way how we are using token, economics to practically provide

safety for the protocol. And this is very important because Cindy fire since all the codes are his public and it's very difficult to you always do that that doesn't have any flaws or or might not even the code. But might be if a liquidation or something that might cause a deficit in the protocol, the practically we have a state facility where the orbital can holders can steak and more Arabic and idea is that if there's some sort of a shortfall event in the protocol, basically got steaks are they can be used to do it to compensate the deficit and

get the protocol back to you about the water in and remove the the deficit and then this way it is more appealing. Article for depositors especially when we are looking at 3 tell you, no institutional said that are looking to deploy Capital. So this is an interesting way to actually connect the economics and an end especially because the basic governance token wear, the token holders are making beef base decisions over the protocol and at the same time, they are transferring the risk to themselves and bearing the

risk of the protocol. So I think as a as a kind of like a concept, it is very interesting and innovative. Snakes that for obvious to us, so we practically gave the keys of the protocol, to the, to the Token of their governess, a couple of weeks. So we any practically means that any kind of change to differ call requires governance boat in. And that means that all day, talking holders have to go, they don't have to participate. But actually, if you want to change something, you do what you need to go to this token out there

and join join us into the governor has come to discuss, more about governance and an N, learn more and of course, version 3, something we're working now. And it's right around the corner. So. That would be pretty interesting update because there's a lot of gas Savings in in the protocol and also plenty of new features such as collateral swap. Channels that Swap and many, many other interesting things in a market. So we're putting money markets, where for some for you could use your units of LP

shirt, sponsor of Peace, shares or care about the shirts as well. So it is very fascinating. Enjoy your Builder, dogs that are the cam I recommend to visit and they changed it to discuss. What else we have a Discord Channel as well? So this is a theme and I hope you had a restraining. Well, I hope you have fun listening to a presentation and here's a pure cord for a telegram and I wish you were a good time for the rest of the week and thank you so much for listening.