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This is funny. I can't exactly see. Okay, we're gonna say thank you for being here before we pause for 1 minute while we wait for chairs. They are prettier and comfier.

We got rugged. So we're, we're.

So it's a conference rug, but thanks for coming on a rainy afternoon. So we'll just like, Stani's going to dance for a little bit.

Oh, yeah. It's not a rave.

When's rave? We can, we could possibly dig in and then pause for chairs.

Yeah, we should do that.

Would you guys like to audience vote, chairs, or just go for it?

Let's go for it!

We got go for it. Everybody, this is Stani. I don't know if you've met Stani, but Stani works for a small project called ETHLEND. And they're pivoting into an updated project called Aave. More recently after Aave, Stani's taken on a lot at Lens.

And Lens is working in the decentralized social media space. And our chairs are here, by the way. And we now also have, whoop. Whoop. OK.

We'll pause. We'll pause. Small swap. Oh, I can't do that 1.

Get you this 1.

0, this is better. OK.

The start of This was an example of building in public.

There is a, I'll even leave out a couple of the lame jokes. So you guys know Stani from Aave and from Lens. And he's also been playing on Twitter, as you've heard, with announcements related to a new stablecoin called Go. And We're going to dig in there to start things off. Go is all that Sunny run through.

What is Go, and why do we need it now?

Yeah. Who, by the way, knows what Go is already? I think we can move to the next question. Okay. Okay, maybe I will quickly explain something about Go.

So obviously like what Go does is that you can supply your cryptographic assets into the Hava protocol and earn yield as you have done probably. I know there's a lot of agents here. And then you can mint Go stable coins so you can earn on your collateral as you're borrowing. So it's basically a, of a protocol and of a community native stable coin. But what's fascinating is about Go is the actual structure itself.

So Go is made from facilitators. So each facilitator has a bucket that can mint specific amount of Go. And the first bucket is effectively minting Go against your positions on Aave. The second 1 is basically flash minting Go. But most exciting thing is that all the reserve factors of the revenue that comes from Go goes directly to the Aave DAO.

And that's interesting, because the Aave protocol, while it's something that our team built, it's actually governed by the decentralized organization, meaning that we can't go and change the code, but there's actually people coming together, and probably a lot of folks in the audience that has participated in Aave governance. Where's Mark Zeller? I know he's here. And that's a very interesting way of actually having a native stablecoin within the Aave ecosystem. But the biggest difference for us is that we're trying to kind of bring a bit bigger or a bit more long-term vision on getting go into various different kind of use cases and especially payments.

And it's actually quite important because you know we're today here in the place where you know this we've operated here over 10 years you know There's a Bitcoin machine you can pay and buy crypto, for example, and a bunch of other cryptocurrencies. And Bitcoin, in the first place, tried to solve peer-to-peer transactions between users. And over the past years, as a community, we're able to create a very resilient and robust financial infrastructure on the blockchain so we have programmable finance with decentralized finance, We have a way to earn yield, hold stable value, exchange value from 1 asset to another. But something that we really haven't solved properly yet is actually how we could use some of these assets, especially stable coins on day-to-day payments, for example, and outside of decentralized finance. So I would some way wanna say, Joseph, that Everything we build is incredible and amazing.

And I'm super glad to see how many of these DeFi protocols and these interest organizations have been evolving. But the next kind of like a thing where I'm super excited about for DeFi is that how the hell we get everyone to use this infrastructure. And that's where I think a lot of people are here to build.

So looking into this, digging into this 1 a bit further, I've been spending a lot of my time in this venue as well. And Stani and I were just talking backstage. Mother, father of 3 walks in with a few kids and wants to order a coffee real quick. We can convince them of the tenets of decentralization and try and get them to onboard with a public-private key pair or something. But this idea, what does the perfect adoption look like when people can utilize the technology without knowing that they need to use it?

What is the road to getting there look like? And kind of as an aside, Aave, sorry, Go as a stablecoin, how is it structured? Is it like a floating peg, or is it to the dollar like many other stablecoins have been that's sort of easily, easy enough to follow in your mind?

Yeah, so it's made in the way it's easy to follow. So it tracks the dollar currency, but effectively you can use the same infrastructure to actually create also other kinds of trackers. So whether that could be some other currency or something completely new that we haven't used or seen before. So that element of familiarity is there. And I personally think that to the point of your question of how we get people to actually use the technology is that we need to create different kinds of bridges.

And I think people in general are very hesitant to changes. And especially because if you are used to something, everything that is new might be a bit scary to people. And we've seen this with various different kinds of technologies. So we are in an interesting situation as a whole crypto community at this moment. I kind of feel that we are doing a lot of innovation, and I personally feel that I'm innovating in the space quite a lot, and there are plenty of people doing so, and A lot of you travel from 1 hackathon to another to build something very cool.

And it's all exciting and helpful. But at the same time, it feels that there's a lot of people in the world that really doesn't understand what we're doing or feels that it's maybe not as exciting or big or maybe even the path to go forward. And I think here's where we actually need to think about it and stop for a second and think about how we build these bridges with the people outside of our space. Because we can't create a fascinating economy between us and trade stable coins, swap NFTs, and send money to each other's DNS names. But if we actually want this technology to go beyond our community, we need to start building these bridges.

And I think that's where things that are familiar. So if you are able to transact with a value that represents something that you use on a daily basis, but the way it's secured for you and the benefits that you're getting are better, then I think we could go to the right direction. And I usually tell people to build, like not build DeFi, but build just like better, faster and stronger finance, because that's the way to actually just build something way more, way more better, but also familiar. And as I mentioned that some of the tech industries and other industries had the similar challenges. If you think about, for example, cars.

You know, when automobiles came over 100 years ago, people were actually, you know, scared of them. And everyone was thinking that you're losing your job and you're actually introducing something that actually is replacing the horse, which is like beloved family member back in those days. So what the car industry basically did is that they started to create familiar concepts, like for example, that we still use today, like horsepower. So having more horsepower is a familiar terminology and naming cars after horses. And you have in each technology, kind of like a similar bridges that has been built.

And I think that's valuable in the conceptual level and how you kind of like design something for mainstream. And then actually the use case. So let's say that with your example where you have a mom or a dad coming and buying coffee, how important for them it is to actually know that they're using crypto or stablecoins while just making it available for them and securing the transactions with a blockchain, but without making actually a big deal about it. And I think that's kind of like the path we have to be moving towards.

So there's over a thousand of you here now. The hackathon just kicked off an hour or so ago. So the Ave and Lens crews have bounties out there. I do most of my work with the Ethereum Foundation. We have bounties out there.

If any of you want to go build, you know, things that look like fiat to fiat tools with crypto in the middle, or we all have these tap and pay systems now that go crypto to fiat, but can we go the other way around? Please, by all means, find 1 another, form teams, go do that. So in the construction of Go, there are many different types of stable coins out there now. We've seen, You know, with capitalistic systems, looking at public-private partnerships, 100% treasury-backed models, we've seen the failure of under-collateralized stablecoins, over-collateralized stablecoins, Dai and company have been out there for a long time, but remained a little more niche. How have you learned from some of these experiments?

What makes code different?

Yeah, I mean, it's interesting because people sometimes come to me and say that there's already a bunch of stable coins, and I keep telling people that there isn't enough stable coins. So what I'm saying is that there's surely something already existing, but that will be the same as saying, like, hey, there's already computers, why aren't we building better computers? Or, hey, there's electric cars, why we can build better electric cars, for example. And what I think, surely there's different kinds of features that really makes Go unique and very flexible as a stable coin that could scale. But for me, what is valuable, actually, looking at beyond Go and all these communities, is that how the communities are managing the risk and reward aspect.

Because end of the day, all the, now, don't get scared what I'm going to say, is that all these protocols will look the same pretty much. And they probably will have the same security parity, meaning that there's not going to be a big difference actually when you're using 1, let's say, landing protocol or another instead of the 1 you were using. And in fact, Aave protocol has been also constantly forked and it provides quite good public good. So I think at some point, and I have this concept called liquid citizen, which means that you can actually relatively easily choose what you want to support and contribute to as a community member on chain. And at that point, you have to kind of like, think about like what's left for the community to actually distinguish itself.

And I think that's where that, especially in decentralized finance, that risk and reward comes into play. And I've been following quite a lot for the past couple of years how these different communities are managing risk and how they're basically creating different kinds of financial opportunities. And I think that's the differentiator because if we want to build a very resilient, sustainable financial system, it has to look something where there's a lot of options and choices for the users. And the more choices, the more room for actually the users and the people to come and contribute to those communities and manage that risk. So I do think that there's going to be like technical parity with all these protocols, but then it's up to the more of a like what, how the risk management of the community will look like, which is gonna be the key difference.

I can't even speak English anymore. Anyways.

Tongue twisters. So 1 of the things kind of bouncing off of this, if there's anybody in this room that I've ever talked your head off, I'm usually going on about how in this industry anything that can be tried will be tried. So I agree on sort of more stables the better. We explore all models, we see what works and what doesn't, hopefully without too much collateral damage moving forward. But as Aave has also iterated and innovated, is there a need to, I guess, is there a need for the appeal for DeFi platforms to grow, to change, to sort of market to more users in a way or do they just need to be better at what they do so that these other systems work.

So when it comes to Aave for example is you know this is these institutional programs that you guys were working on still you know of great interest or is growing peer-to-peer sort of usership of great interest? Or at this point, is it just making sure that it works, it works well so that people can make use of it through their forks, through their experimentation and so on?

Yeah, I guess it's kind of like thinking about the audience and what it is today, for example. I do think DeFi has grown quite a lot for the past few years. I think from a few thousand people to quite a significant number that is today interacting not just with the Aave protocol and on various networks. And actually I like the fact that there's different networks and we don't all have to be on Ethereum because it would be quite expensive. But also that when we look at the data at Aave, we've seen that, for example, in networks where the transaction fees are lower, we see smaller deposits, but more users, which is kind of the idea of providing access to finance and democratizing finance in general.

But I do think that Something that has evolved quite a lot is that, especially within the Aave community and the Aave DAO is that it has become more professional. So when we talk to people that necessarily aren't the typical DGNs, setting yield farms in the basement but are actually working in financial institutions, are excited about the space and kind of have high hopes for DeFi becoming more available and used in institutional scale. Something that we hear quite often is that the level of professionalism that we are starting to see in decent trust finance is something that actually like starts to create those accesses to these audiences. And that basically also includes different kinds of risk management, service providers, smart contract code audits and verifications and protocol approvations and also development work. So I just think that that kind of like a niche audience has been growing constantly, but now we're going more towards a path where we see more institutions participating.

And this in fact happened during last year before FDX. What happened is that we were participating in Project Guardian where for example JPM, first time they deployed a fork of the Aave protocol where they did it on a public blockchain network and used verifiable credentials and used cash deposits as assets on the protocol. So that was the first public blockchain interaction from a financial institution at that scale. I mean, if FTX would happen earlier, probably that won't happen at all. But the point is here is that there's a huge amount of interest from institutions.

While I do think is that we still need to think about like how we build DeFi and what's the kind of main audience and build these networks and communities that they kind of like support the more community ethos of decentralization. But I think I've never been as bullish on DeFi as I'm today and specifically because now we've built a lot of that base layer. So we have a lot of these baseline protocols where we can do different kinds of financial transactions. And the kind of next more interesting step is that, well, how will the DeFi front end and the access point look like? So who's going to build that part?

And I do have questions on both front ends and on institutional pieces that I'm curious about, but you also mentioned the DAO and governance in general. Stani and I have known each other in 1 way or another for six-ish years, and getting decentralized governance right is hard, hence my ETHLEN joke, you know, kind of like when I came in. We've seen this 2021 era of app launches that, you know, useless governance tokens to completely plutocratic systems where 1 entity gets 30%, another entity gets 30%, you sell 30% of the tokens and then you vote with the tokens. How have you guys learned over time? How has Aave governance changed in a way that will be more conducive to incentivizing participation, to seeing actual distribution amongst token holders, and people taking leadership positions within?

Yeah, It's a fascinating question because the whole question of the governance and how it should look like really reflects what the underlying scope is. In Aave community the scope is quite simple. It's the Aave protocol and things that happen in the community. So many of, for example, the boundaries that you mentioned that are coming from Aave Grants DAO, those are capital allocations from the Aave DAO as well. So there's kind of like a quite relatively clear scope.

What is difficult for Aave DAO is that if you compare to other protocols in Aave you have this component of collateralization So there's a certain amount of risk management involved. And as markets are moving and assets are moving dynamically all the time, you also need to manage the risk dynamically. And obviously, because the Aave community is known to be driven by innovation, so there's constantly some sort of protocol updates, fixes, or even smaller improvements that are done in an upgradable way, they all cause risk. So in some perspective, there's this kind of like a human error involved as well. And I'm surprised how the Aave DAO, but also like looking at a few other communities, how well they've actually managed the risk, given that you have a bunch of people across the world coming together, voting on different kinds of decisions, and actually make it work better than the traditional finance.

And probably most of the people there are and across DeFi are without a financial degree. So I think that's a amazing accomplishment. But I do think that it's really like a question of like what kind of things should be governed and and what like even maybe in the beginning you probably want to think about like how do you go towards progressive decentralization? And this is the very typical playbook that Aave has followed. And then maybe the next step is that, what are the steps to follow also on governance?

So how you get rid of governance in things where it doesn't provide the value or it adds risk that happens constantly. So there's kind of like those 2 paths that has to be taken into consideration. So you need governance, but also you also need to know where not to apply governance as well.

Yeah, I guess this is how we get to ossification within these systems, or at least governance minimalism. But so you also mentioned a few answers ago the word front ends, which gave me this thought on, I had this conversation yesterday with someone here. When we think about the different types of parties that we want to use systems like these, you guys have probably all heard at some point or another, some other large DeFi application, maybe they have to track some things on their normal front end because of regulatory requirement. Maybe even someday, some groups or others will be forced to KYC you on the normal front end. This is because you might have an entity where some developers work and the entity owns the URL.

And in order for them to be compliant, then they need to follow whatever jurisdictions compliance requires. But at the root level, we have these contracts that we've built that kind of serve the world. As far as, given everything that's happened regulatorily recently, and there's been more and more pressure on the industry, when you think about the future and adoption of this technology, is it possible for us to get to a point where, let's say the enterprise side and the users here can all be utilizing the same contracts even if they have different entrance points for let's say institutions to use Go versus these 2 to liquidity provide? Or is there still some kind of a need to divide the intranets from the internets where we see some sort of large financial institutions, for example, that are only able to onboard if you have the right certification from a company. So where do you see this going in the future as far as who can participate in these systems?

Will everybody be able to use the same thing? Or will we kind of need to divide as we go to use case depending?

Yeah, I mean short answer is yes, that's kind of like, you know, all roads will come together. I think that's, you know, that's the vision. I think quite a lot of people share in this community. I also think that it's also at this stage important because we're building DeFi from the public good perspective. So, like, our kind of vision is that our protocol becomes enough evolved that, you know, it's just there and can serve on any network that is available and it provides access to everyone.

And that's the beauty of decentralized systems and kind of like permissionless access, that it really functions in a neutral way. So a person from 1 part of the world gets the same treatment as a person another part of the world. And that's very important when it comes to finance. But also I know that once we have a good public, good infrastructure, what's also fascinating is that what you can actually build on top, that might be some sort of tailored versions of what you can actually create and optimize. So I think these both things will exist in parallel.

But I think the main mission is to have a public first facing financial infrastructure that's not really owned by any, or like a group of people or entities. And I think like internet started this way. So, we had a very decentralized idea of what the internet should be and it centralized very quickly because it's very easy to use a service provider and today when we look at Internet in general, it's basically run by big companies, so the big tech. And our kind of like a goal is also to say that Internet needs to be more equitable and democratic, so there should be DAOs, there should be users who have a stake and they're able to have ownership of the networks they use daily basis but there should be still companies because they do some things quite efficiently. But the balance that we have now on the internet and also in financial infrastructure isn't really equitable at the moment and fair.

And that's why that public infrastructure finance as public infrastructure is the main goal. And then I don't really care about what people build.

This might be an easy 1, but I'm covered in optimism stuff with my pin and my bright red socks, and 1 of the AVE bounties I think related to deploying something on optimism and L2s. As people do move throughout tying it back to the hackathon again from 1 layer 2 to another, at some point layer threes, side chains, everybody's everything is EVM based, which is great. Do you have any worries about liquidity depth beneath them, or are we able to tie these systems together relatively soon through efficient bridging and whatnot?

Yeah. I think the security aspect is still kind of like a concern to me when it comes to like, so don't get me wrong. I'm a big fan of layer twos and ZK rollups and optimistic rollups, but I think it's that we're going very quickly towards utilizing these networks. And even when we look at the amounts of assets that are going to layer twos, that's quite significant. And what I think is that the infrastructure there from security perspective isn't necessarily complete.

So I feel that we're going too fast, and we should slow down. And I think you can do more innovation on layer 2s, but the mainnet has a lot of value, even just securing assets and not only storing hashes. But down the line, we're going to go to a path where layer 2s have incredible tech, and actually you can transact there with a relatively low cost. And I think that's where things become interesting, because if you can actually derive that layer 1 security into a roll up and have low transaction fees, that actually opens a completely new use cases. And even in finance, and I think something that I personally would love to see is kind of like a use cases regarding that front end infrastructure of payments and settlements between people.

And even more innovative way than we maybe have used to in the past when we are buying a cup of coffee. Or I would definitely want to see some exciting ways to actually pay and reward users. But I do think that if I will build something today, probably I will just go to the layer 2 and deploy there something instead of Ethereum because the costs are lower, you get more users, More users means more feedback, better product, better protocol. I think that's where, that's probably will be my playbook.

The settlement to the main chain is sort of the game changer in all of this because you can go use an EVM copy anywhere, but if we remove the attack vector of it not having its World War III proof security, then things become a bit more funky. Do you think that the L2s become a bit more use case specific over time? Like if Go succeeds in a major way, Could you see a Go-specific L2 where every application kind of, you know, syncs to the same place before it goes back to this layer 1? Or will it kind of continue to live in whichever ecosystem becomes the DeFi home is kind of in 1 place, whereas the social media home is kind of in another?

Yeah, I mean, looking at the past, the Aave protocol is deployed in multiple networks. And I think it's probably 1 of the rarest protocols where you have actually cross-chain governance, meaning that if, let's say, Mark Zeller from Aave Chan Initiative, if he does a proposal on, which is a community member in Aave, does a proposal on the Polygon network to change some of the risk parameters, users, the token holders on Ethereum network, they can actually vote on that proposal and there's a cross-chain messaging. And this was actually available before many of the cross-chain messaging protocols were built, but just the use case was the cross-chain governance perspective. And I think there's value on being a bit everywhere because I feel that every network has its own community and kind of like our own vision. And it brings that kind of like a financial layer there too.

And you know, Aave protocol is an empowering technology. So the idea of it is to enable users to do something else. You know, probably some of you were doing DeFi somewhere, you were borrowing things from Aave to farm something else. But the idea is that it's enabling technology. Down the line, I could see some value if there is like a specific network dedicated to specific transactions that have very high velocity and throughput.

And I think that that's basically what something like payments are. Because the thing about payments, it's not just like going and buying a cup of coffee. That's a crypto-specific problem that we're trying to solve. We're in so baby steps. But if you go down the line, how do you actually settle payments in microseconds and have a lot of finality there and a lot of scale.

And that's where things become quite interesting. So in those kind of use cases, I would see it definitely could be exciting.

We have just a couple of minutes left and I still hope 1 of you does build this fiat 2 token stable coin mechanism. So find 1 another afterwards. But there is a little bit of time for audience Q&A. So take like 4 seconds to think about it. Okay, and yep, that didn't take very long.

We've got time for just a couple and we'll see where it goes. And your name first if you can. If it's not on, you can shout.

Indigent score. Yeah. If you

speak out loud, I can repeat the question.

Hi, Rick. My question is, 1 of the concerns for Aave is the reliance on external factors. So what's your comment? Will we see an Oracle-based Aave before?

The question from Rick was that there's some concern that he's got about reliance on external factors and asked if there was potential for something like an oracle-less AVE V4. Feel free to go into context about, for those that are newer here, what a little bit of this means, the use of Oracles, and so on and so forth. Yeah.

I mean, as I mentioned previously, that the Aave, the kind of like business model of the Aave protocol is quite unique because you have this idea of collateralization and to understand what's the collateralization so if you supply certain amount of cryptographic assets and you borrow liquidity, let's say stable coins, you kind of need to price these assets. And the way we have solved the problem in DeFi is that we rely on smart contracts that post feeds, that you can fetch those price feeds and have a working system. Now, the issue with Oracle's is that it does increase or introduce centralized also failure point. And I think some of the Oracle providers, Chainlink is quite widely used. In decentralized finance, they've done a lot of work in terms of mitigating various kinds of risks and being battle tested in various moments.

But I think the kind of like a challenge is that the whole space is relying pretty much on chain link. And now what people are thinking in DeFi is that well, how do you actually can be less relying on 1 entity or how you could actually even create something better. So I personally think there's different ways you could actually build alternative systems, But I think like the first step is to how you can actually decentralize or diversify that risk that you have from oracles. And I think there's enough liquidity in decentralized finance is that you could actually make the economics work. Because if the economics doesn't work, then it's very hard to make this all price feeds to work.

And I think there is a decent amount of new market entries coming from Oracle providers. I think there was 1 prism called this API tree and there's probably a couple of other ones. So it's a space like if you really want to innovate that's a lot of upside there because I think there's definitely innovation that is needed.

Cool. So since we've got less than a minute left, I just wanted to say on a personal note. Okay, go for it.

Yeah, sorry, 1 more questions. I'm curious, do you think that the existing tendency to build more and more stablecoins proves that crypto tokens did not become a real money in terms of these money functions like medium of exchange, unit of account? And if no then what's the reason to like and what's the future of stablecoins if like crypto tokens would become a real money like for micro payments and all the other utilities like which we use money for?

Yeah, I mean, this is a very good question because like, you know, there are a lot of people here and also I personally believe like, you know, it is also ultrasound money in some ways. And the idea is that you could use just the accounting unit of a blockchain to settle, let's say, payment transactions and whatnot. I guess you could do that, and that's been available for quite a long time. You know, if you don't have to pay a lot of transaction fees, right? I think 1 of the challenges is that the actual value of that unit is fluctuating quite a lot.

So I think, especially when I was talking about in the beginning of the talk about the fact that we need to build bridges if you want to get more adoption of, let's say, stable coins into the internet payments infrastructure, which is actually a huge opportunity because if you think about like the stripes and paypals of the world, how much in visas and credit cards traction there is. I think that having some sort of a stable value is important for people, especially when you are settling transactions or you're earning, for example, salary. But even with the national currencies, it's not really happening in every jurisdiction. If you go as far as Argentina, the inflation might be

50%

there, meaning that whatever you earn in a half a year you can lose it, lose the value. And that's another side of the coin and the problem. But I do believe if there is some sort of accounting unit that is widely used that could stabilize down the line. And also there's the third thing that you know stablecoins they don't need to track actually a currency that is somewhere in an economy but they could actually track something else that is more interesting for the day-to-day usage or like economy as well.

All right, we are out of time. I did just want to say that Stani has a lot going on at the moment. He's been active on Twitter about some big life changes that are coming soon. So I want to say thank you so much for taking the time to be here. We've been trying to grow a new community and a new big event in the Ethereum ecosystem here in Prague.

We're luckier than most blockchain ecosystems to have things like, you know, ETHCC is run by Ethereum France, Devcon is Ethereum Foundation, Denver is by Denver, Prague is from Paralumni Polis and Ductate productions and on and on and on and on.

And Raves are by Aave.

Raves are by Aave. And we have this real distributed element that EVE Planet, EdCon, I could roll them all out, but the more of these we can grow, the stronger the ecosystem is. And to Ave and to Lens, thank you for your support, even during your busiest life moments. Congratulations, and thank you all so much. Thank you.

Thank you.