Stablecoin adoption could lead to DeFi growth, says Aave founder

cointelegraph.com:

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 fireside chat titled “DeFi: Resilience in the Face of Global Uncertainty,” Kulechov and Cointelegraph’s managing editor Alex Cohen discussed various topics, including DeFi’s risks compared to traditional finance (TradFi) and how stablecoins can lead to more DeFi adoption.

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: 

When asked about onboarding regular people who may not be as “tech-savvy” into the DeFi space, Kulechov noted that stablecoins and payments could play an important role. According to the Aave executive, building the “payment layer,” which involves stablecoins, can potentially hook regular people into the space, eventually introducing them into DeFi.

“It’s more about building that payment layer, and then the whole DeFi loop starts to close because you have a way to exchange value easily,” he said. In addition, Kulechov also noted that pushing the innovation curve further can break more adoption.

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:

The Aave founder added that the stablecoins, which he described as the “most resilient ones,” are overcollateralized.

Related: DeFi enjoys prolific start to 2023: DappRadar