Aave’s Stani Kulechov: What Wall Street Thinks About DeFi’s $500T Opportunity

I think that what will happen is that we will replace the traditional database systems with DeFi systems. So the way to see DeFi scale is that for users' perspective, for consumers, nothing really changed. We will see the same transactions. We will see dollars, we'll see pounds, we'll see euros, we'll see gold. But under the hood, what actually happens is that a lot of this value will be just represented on the blockchain and secured and transacted within these blockchain-based DeFi protocols.

I think that what will happen is that we will replace the traditional database systems with DeFi systems. So the way to see DeFi scale is that for users' perspective, for consumers, nothing really changed, or institutions. We will see the same transactions. We will see dollars, we will see pounds, we'll see euros, we'll see gold. But under the hood, what actually happens is that a lot of this value will be just represented on the blockchain and secured and transacted within these blockchain-based DeFi protocols. So for average consumer user nothing really changes but for a lot of these infrastructure and institutions behind the scene actually there's a lot of efficiency and cost structure improvements that will happen. So this sort of adoption will happen in the next decade or so.

I think every single database that manages financial markets today that is traditional digital database can be replaced by a blockchain one and every operation that is happening financially in the traditional finance can be replaced by a protocol. And what I think is that it can actually eat the whole 500 trillion asset base but the opportunity is actually bigger. The reason we have sort of a 400-500 billion asset base today in traditional finance is that that's where the liquidity constraints at the moment are. But with decentralized finance, you can start actually creating liquidity where it doesn't exist before. Making real estate infrastructure more liquid, private equity and private stock more liquid. There's a lot of funding opportunities. There's a lot of value that can be traded on the blockchain more efficiently that isn't just efficient to do as of today.

Yeah. And I think anything that kind of felt cumbersome to trade in the traditional financial world could actually be traded. There is always a buyer and a seller and tokenization simply enables this activity.