Stani Kulechov, the CEO of Aave, highlighted a few of the issues with the copy-and-paste nature these days’s DeFi area, including that the overall basics are still strong.
Aave CEO Defines Decentralization
The DeFi economy can be imbalanced, typically preferring rich whales over average users. This is especially real when high Ethereum costs locked out retail financiers.
Aave founder and CEO Stani Kulechov spoke to Crypto Briefing about DeFi’s problems and prospective solutions.
While distribution designs prefer bigger accounts, “& ldquo; this can be fixed by merely developing more democratic rewards instead of copy/pasting the same model all over again,” & rdquo; said Kulechov.”
DeFi” becomes a lot less fascinating if it’s replacing a centralized, opaque system with another centralized, nontransparent system.
There’s potential here to build an actually much better financial system.
Not a cheaper way to yield farm and trade shitcoins.
—– Camila Russo (@CamiRusso) February 25, 2021
Decentralization is, obviously, the response. As Kulechov mentioned, decentralization in DeFi can be something of a misnomer, and he used his own method for evaluating projects in the space.
“& ldquo; I personally believe that a protocol is decentralized when the starting group’s proposal can be voted successfully versus,” & rdquo; said Kulechov, & ldquo; and the team, including its early investors, do not hold over 50% of the tokens.”
& rdquo; Yield Farming & ldquo; Craze & rdquo; Is on
Its Way Out Speaking With Crypto Briefing, Kulechov stated that DeFi has actually always been about rewards, adding that “& ldquo; yield farming is indeed an intriguing method to reward user behavior such as supplying liquidity. The sad part is that numerous yield farming procedures are providing yields that are absolutely unsustainable.”
& rdquo; He went on to state that the yield farming practices we see today are “& ldquo; pretty much money printing.”
“& rdquo; & ldquo; I believe that the trend will end at some point and we will see more sustainable incentives.”
& rdquo; Kulechov discussed the “& ldquo; fatigue & rdquo; suffered by the yield farming industry in recent months, adding that “& ldquo; the tiredness is related to innovation.”
“& rdquo; & ldquo; Most of the liquidity mining rewards are copy-pasted from other notable jobs and do not offer imaginative methods for neighborhoods to disperse token governance and let neighborhoods get more involved into the job.”
& rdquo; While liquidity mining might endure for a while longer, said Kulechov, tasks must involve their whole communities in decentralized token distributions.
Kulechov added that development advances his own project, Aave, which just recently launched v2 of its governance model, enabling the neighborhood to delegate voting power. Aave is exploring Layer 2 options, he added, saying, “& ldquo; we will see some development there soon.”