Welcome. Should we go this way?
Oh, sorry. Sorry. I was trying to rob your identity. Sorry.
Thanks for making the time to be here. This is awesome. I'm really excited. This is a terrific opportunity for all the people in Argentina. Visitors, thank you for coming. A long trip. I know some people flew like 36 hours, which is insane. We live really far away, but we are really welcoming of you and thank you, Stani, for being here. I know it has been kind of a crazy week for you. Yes, some big launches. So if you want to maybe take it from there, tell us what you have done this week for the community.
Yeah, there have been some launches this week. Some of you might know this. One of the biggest things we launched earlier this week is the Aave app. As you know, Aave has been able to grow to be quite significant, a DeFi protocol with between 50 to 60 billion worth of assets net deposits. One of the things that we want to do at Aave is simply bring DeFi to everyone with different kinds of integrations but also direct to consumers.
Yeah. And the app is a simple way of using Aave by linking your bank account, simple sign up with an email or a phone number, and being able to create recurring payments and get the benefits of Aave with all the abstraction that we do on the application level. So we abstract away networks, gas, the concepts of wallets, while still preserving the fundamental self-custodial access to DeFi for users. This is what we think is the iPhone moment for DeFi and will scale DeFi to millions and millions of users in the future. The second thing we launched, I think when I met you I was just writing about the launch itself, was the Aave v4 release for testnet. This is the next generation protocol that we have been building the past two years, which makes Aave more capital efficient, allows very granular risk segregation of the assets, and makes Aave more readily available for RWAs in the future as well. So it's been an extremely long week and also tomorrow we have a rave, so the whole week is going to be very...
Who's going to be there, you know?
Yeah, congrats on that. Quite a week. I was teasing him because we need the app on Android. In Latin America it's super Android oriented, so we are looking forward to that.
And that will be available upon the launch. It's actually quite interesting to be here in Argentina. As I mentioned, I come here almost every year for the past few years. I always notice how much of a need there is for crypto and DeFi and what kind of impact it can create. Especially Aave has had a community and user base in Argentina and across Latin America for years now. I just see that community becoming stronger. With DeFi and all these new stablecoins, especially local stablecoins, it gives a lot of accessibility for users to preserve wealth. So for me, being able to come here once a year is a big thing. Obviously the other big thing is to come here for the food, of course.
What's your favorite place if I may ask?
I think there are so many new good places to eat, but you can get really decent food almost anywhere in Argentina. I do like a good steak at Don Julio.
But you like a good asado, right?
Asado is the best. I'm a big barbecue person. I even do barbecue during the winter when it's rainy, with an umbrella. So I'm very into barbecue.
So for most Argentinian people in crypto, we have been getting into the ecosystem and building because of stuff like inflation, capital controls, trying to create something on the frontier. What was the thing that drove you to start building crypto?
Yeah, for me the main ideal was democratizing finance. Before building Aave, discovering Ethereum, I was building fintech applications and the ability to extend credits for everyday usage and seed that capital by using the internet. This was when the whole marketplace economy was booming, peer-to-peer lending and crowdfunding. One of the challenges in that fintech environment is that a lot of these rails are regional, and the rules and regulations are regional. But what excited me about DeFi and Ethereum specifically is that you effectively have the ability to create applications that are automated, accessible, and permissionless. I think that was something we realized we are having for the first time in financial technology, where you can innovate in one part of the world and export that globally. That's a huge benefit because it ensures that everyone has equal access to the same financial opportunities. That's what's actually happening now in DeFi. So fast forward eight years, I think we're evolving on that path quite well.
So the first time I knew you guys, you were not called Aave, you were called ETHLend.
That's not very well known. That means you're an OG if you know that. I knew about you guys in Chile for a Bitcoin Day event, but I wanted to...
That was probably our first event, actually. That was probably 2017 or...
So we even started our events from Latin America.
And do you see any difference between regions, even when you approach the product? There are a lot of entrepreneurs here thinking about how they launch something to the public. Do you think in different terms for something like Latin America to Asia to Europe, US?
Yeah, definitely. Localization is extremely important. I think that's undervalued, especially in crypto where we typically think in dollars and trade in dollars. Localization is very important, especially when you go towards more mainstream. Also, typically if we earn yield or borrow funds, we use those funds in the real world and repay with real world assets or revenue we are creating as individuals. So it's really important going forward to understand how we can take some of these local currencies and create similar stablecoins, using that as a gateway to bring more people into the space. Every single region has its own peculiarity, and a lot depends on the rails, the on-ramping, how easy it is, how people actually acquire stablecoins. For me, it was a new experience to see when I first came here that the typical way of buying crypto or stablecoins is cash payments. I found it very particular to Argentina, and that's why you always have to think about these localization aspects. Things also evolve. On that first trip to Argentina, the blue rate was half of the official dollar rate, and now that gap is narrowing, which affects the economy and how people acquire stablecoins or even pay with cards today.
Yeah. So one more entrepreneurial question. How do you define, or what was your product-market fit moment for Aave? Where did you find that hey, we are doing this and this is right?
Yeah, I think product-market fit is very tailored to a specific product. For me, probably it was during 2020 when we launched Aave in January. By the time between January and March, COVID was kicking in. At that point, in March or April, we were in full lockdown. What happened during those times is that government interest rates went to zero, and a lot of people had a lot of time to explore financial opportunities and understand how to preserve wealth. We noticed an inflow of capital into DeFi. DeFi was very small, probably like 4,000 or 5,000 individuals getting through the UX barriers and determined to use DeFi. Seeing the responses, how important yield and financial opportunities are, and what Aave can bring, that was one big thing. A second big PMF factor for me was meeting people at different events who explained how they were using Aave. A lot of these ways they were using Aave in terms of borrowing was just funding everyday things: funding their mortgage, funding their tuition, buying a car while holding their crypto assets as a way to preserve wealth. Those two things were big for me.
Yeah. So I want to highlight that when you build products, timing matters a lot. Being there for DeFi summer, low interest rates, kind of the perfect storm for this to start exploding, and also the necessity for people. You mentioned how regular people use this. Do you have any stories of users that you might want to share with us?
Yeah, it's interesting how the user base has been evolving. A lot of the early users were just crypto-native users, then it graduated to seeing funds using Aave, more crypto-native funds, and also everyday people. The demographic we have in Argentina through integrations like yours, seeing how creating this access helps a lot and being a better alternative for national currencies and bringing that stability, is a really eye-opening moment for me. It might matter a little less today, but it was a really big thing for me a few years ago when I first came here.
So there has been a lot of talk about stablecoins in the last couple of years. Do you have any thoughts to share with the audience? There are a lot of startups working around savings, payments, the new banking infrastructure, lending. It's crucial for that. What's your view and what's the future, or what's your dream of the future?
Yeah, I mean Aave is very stablecoin-centric. There's about 15 billion in stablecoins. I think we're going to see a lot of stablecoins coming in, especially because regulation is becoming more clear. Not just fintech, but big tech and commerce are launching stablecoins. I do think there are economies of scale that will apply to stablecoins, meaning that down the line, the biggest ones with the biggest network effects will take more market share, but it will happen in open networks in decentralized finance, and that's where the battlefield will be. That's great because DeFi is open and transparent, and you can see everything happening there. That's a good thing. I also think that while stablecoins are great, I do fear the aspect of dollarization. I don't think the whole world needs to live under a dollar. In fact, the opposite: the world should find ways to settle transactions with minimal costs but ensure diversity of these stable assets. Over time, I'm also a big believer that eventually Bitcoin and Ethereum will stabilize more, so they could be used not just as a store of value but in some ways for transacting. Stablecoins are a really big innovation and will bring people into the space, but we have to be really careful not to rely on the US dollar specifically. It's really important for Latin America, Africa, and APAC to ensure there is this kind of sovereign currency. That's why I'm also really excited about tokenizing local stablecoins, local currencies, and exporting the local currency in a technological form. US-based dollar stablecoins are a great example of how they've been able to buy a lot of T-bills at scale and help the US economy.
Yeah, totally. I was telling in the back that we are launching today the RGT, which is a stablecoin of the RGD and PES, a rebasing stablecoin, just for that. In a way, you need to generate those tokens locally for the crypto economy to coexist between both worlds. I think that's super important. Any views on real-world assets? Because right now stablecoins are the main thing in Aave. Have you seen or do you foresee this idea of putting a house into Aave and having a loan, like a mortgage?
