Let's go. Oh, the light's so bright. Feels like everyone came to see a movie. Where's the popcorn? Does everybody have popcorn? All right. Welcome everybody to the launch of the Human Protocol podcast. Stani, welcome as first guest for the launch. Thank you for joining me.
The honor is all mine. Just for context, the Human Protocol podcast is all about the personal side of building big things. My interest as somebody who's been in the space for nine years is what it actually felt like to build the things that we constantly talk about. We constantly talk about the alpha. We constantly talk about the success and the dramas etc. I don't really care about that. I want to know who the people are behind the big projects and again what that arc is, what the personal arc, the personal lessons, the personal stories are all about. So that's context for everybody. All right, let's get going. I would love to know a little bit about who you were before you were Stani, the founder of A Labs. We can go as far back as you want. We can go to Estonia, Finland, your dad getting you the computer hacking on Linux, dropping out, whatever you want to start with.
Yeah, my first question was like how far I should go, but maybe yeah, I mean when I was growing up like online and computers were a big thing. And it started with a broadband connection and I think one of the first things I took really seriously online was playing Counterstrike.
That was, I know how many of you guys have played Counterstrike. Okay, it's a very mature audience. That means that I spent a lot of time on computers and you know while you weren't playing you were doing some different things and I lived with my older brother who was 5 years older. He was very excited about operating systems like Linux and really understanding kernels and contributing to those communities. I was more interested in kind of like web internet and the access it provided and for me it was really interesting because I kind of felt when internet started to pick up more that it sort of puts all the businesses and opportunities onto the same kind of like a flat level playing field. So you go to a website and you don't know if that website or application is a business with 4,000 people or four people you know.
And at that time obviously it was very early. So you know things like buying online was not as smooth as possible like for example as like putting credit card details and trusting Stripe and whatnot like it was before that. So doing anything with a credit card online, you were kind of like risking.
Pretty much like how people feel with maybe crypto today still a bit and DeFi and so forth. So what was interesting for me is that you could actually build these applications and I started with very simple stuff like websites and then started to use more PHP programming and at some point it became more interesting because you started to see more like web frameworks to build really like more complex and product-like applications on web. And I think I was like 16 at that point when Ruby and Rails was a big thing. And I think Twitter also was built originally with that in mind. And that was kind of like the Web 2.0 movement and I used to be at like a sports high school and my dad was very into like sports and so somewhat it made me into sports and at that point like after first year of high school I kind of dropped out basically and just started to program like every day basically. I even left home in the morning just pretending going to school.
How long did you hide that for?
Whoa. Okay. What was the push back from your family when you dropped out? First of all, when they found out that after a year you hadn't been to school, was that a little bit?
I think they kind of were worried, but also like they didn't care much. Not that my parents didn't care but you know I had a lot of freedom in my life and when I was growing up so I think they were like less concerned and I just came up with reasons and just to continue programming. And I think then I did like a lot of applications like I tried to build anything that I could imagine and reusing a lot of like templates and code and I think it was until like early 20s when I actually started to like build a startup.
Okay. And at that point it was more of a like a fintech platform. It was a time when like crowdfunding, peer-to-peer lending was really thinking of marketplace economies.
Yeah. Yes. Like marketplace economies and I was building this marketplace where you could actually buy receivables as an investor, diversify your portfolio and that funding goes to fund businesses for invoice financing. Very like nerdy and fintechy solution.
What attracted you to that? Like out of everything that you could build, why that?
I think I felt that finance wasn't evolved enough on the web and I think that there was a lot that was already built like e-commerce was working pretty well. You could order anything online. Then also social was already like taking off quite a lot and like a lot of use cases but finance was I think it was like the last slow-moving bastion at that point and it was even like before any mobile banking or any of the Revoluts and whatnot and banking and finance felt like brick and mortar and financial services in general. So I was convinced that you know this is a field that is going to move quite a lot. And once I started to actually build some of the stuff I realized why it actually didn't move because of regulation and the complexity and especially with the compliance and regulation it was a really messy show. It was really hard to understand like what was legal and what not.
Yeah. Like what is the gray area.
And at that time especially like peer-to-peer lending crowdfunding started to get regulated across Europe like basically member country after member country and I think for me that was really painful because you have to spend a lot of resources for like legal fees and you have this uncertainty and eventually you are trying to build like a accessible financial application that is useful and then you're sort of like broken down into regions. So I found it a really bit challenging and obviously at that point we failed which was pretty okay.
Were you, was that good? Were you just, you know what, this is fine. Close down this chapter because realistically in this space, the way it is right now, there's no moving the needle the way you would want it to.
Yeah, I wasn't too worried because we didn't have that many customers or users. So, didn't have to send many emails. And I think it was really easy to close because I've done so many of these different applications beforehand and just like left them online to be used and move to the next thing that is more viable.
And yeah, it wasn't a hard decision at all. It was frustrating to see how hard it was to build the stuff and I tried to learn a lot about compliance, a lot about the regulatory frameworks and then when I stopped I actually wanted to go then to uni and instead of computer science I wanted to study law because I really wanted to understand the legal frameworks, compliance and also basically the commercial side. To get into law school I had to actually go back to high school and it sucked because you were like in your 20s and everyone else were like, you know, 16.
Yeah, I had to go there and how many years? Two. Well, it was a three-year program. But I did it in six months.
And I did it in a brute force tactic. So there's exams every couple of months. So you just take as many books as possible and as many exams and you just try to pass them. Like that was the strategy and that's how I got it in completion really quickly.
Six months. Nice. Was that in... brute force works really well. This is it. Like you know when you need it, you need it. What was that like? Was it exciting? And was it like okay I'm going to go do this real quick. Get into law, sort out the financial system.
Well, in Finland, where I'm from, it's actually interesting the whole educational system because kind of like all the applicants are like competing from the same positions.
Because the education is free, right? So, you have to like try to get into a school.
And these high demand programs then obviously like you might try like every year. Maybe you get into the first, second, third or fifth or sixth. I was lucky enough to get on the second year. And it was actually pretty nice because end of my studies I was really trying to think about like what to do next. Coming closer to graduation and I was reading a lot of Reddit at that time and I stumbled upon the Ethereum subreddit. And I was reading a lot about it and I was like this is interesting. And I saw a lot of very early like financial DApps like decentralized applications that were very primitive at that point. And I was reading more about this and I was like wow this is actually you know you actually can build finance but in a completely an environment where you have permissionless access so you don't need to ask for API keys and you don't need to really have this sort of restrictions like it feels borderless and the idea of the governance and you just need a wallet and you can interact and everything is transparent. And that really blew my mind because this is what finance should be.
Without all this restrictions like regionality and bottlenecks you can actually truly just innovate on programmable finance and that's just like at that point I was hooked.
Was the hooking almost immediate because you had all done this in the real world standard world and then you saw this possibility instantly? What was the time frame of getting onto the subreddit and then being like I need to build here?
Yeah, so the things that I was building in fintech was you know like borderless and trying to like really have a global audience and this was actually the environment where you could do that very efficiently. And I started to think about ideas and mainly related to finance and lending because that was what I've done in the past and then I was thinking that it could be interesting if you can just do whole like end to end loan on the smart contracts and use those benefits but in a way that's you know a borrower has an incentive to pay it back.
Okay. So at that point we made a small proof of concept where we kept basically tokens as collateral, ERC-20s and you borrow Ethereum and ether and at that point so it was 16, 17 like at that point there wasn't stablecoins on Ethereum so it was very very early and that was the sort of a proof of concept.
Okay so then let's move to the moment where you start building this proof of concept and then ETHLend and then ETHLend starts getting traction and traction. What does that feel like when you are suddenly responsible for all of this money and its security and it's on you to make sure that everything works and doesn't break?
I mean, it's horrible. It is really not a great responsibility. And I'm also wondering how other DeFi founders think about this and feel about it. But and developers particularly because you know the blockchain tests your confidence all the time and sometimes things can be out of your control. So it's something that you have to have like a way of thinking about it and processing but it is something that changed the approach of like this is not anymore experimentation. This is actually a significant product or a protocol that is being used by other people. So there is value and you have to think what's best for the users and yeah you definitely change your mind about like that you know you really have there something that people are using and you need to ensure it's very resilient.
How many sleepless nights? How many like what how tired were you during that time and how stressed? Because I want to normalize like maybe you know that intense process of building something that then becomes one of the biggest projects like what did that cost you? What did you go through?
Yeah, I mean it is really hard. I think every protocol iteration what we build between whether it's like ETHLend or V1, 2, 3 and 4 like it's really you know the whole team is putting a lot of energy into it and all our kind of like partners and so forth like it is something where which really gets everyone heads down for very long period of time and focusing on all the integrated details and edge cases and whatnot. So it is definitely like one of the most hardest things ever we do.
And the whole process and we probably have like a protocol iteration every like a couple of years and V3 has been around for a few years but V2 we already been building it and designing and thinking about it for over two years. So it is a really like place where like you have to just put your whole mind into it across the team. And it is definitely not easy and I think protocol development is one of the most difficult things to do like if there's no shortcuts basically like you have to really think everything up to you know the smallest rounding. You know there's a lot but there's also great people that help us so we're not alone there.
And obviously now you have a big team and you know the let's say the responsibility is shared. Do you still feel that very intense personal responsibility for it all the same way as you did in the beginning?
