Aave — Telegram QUIZ & AMA — May 20
On Wednesday, May 20, we had the pleasure to welcome to our Telegram chat:
Marc Zeller, CEO of Aave
We asked him questions about the development of Aave, ranked 73 on CoinMarketCap.
Some sentences have been slightly edited for readability but the meaning has been conserved.
Summary
In this AMA, Mark Zeller, Integration Lead of Aave, joined the GAINS community to tell us about his project.
Aave is a non-custodian protocol that allows lenders to earn passive income on deposits and borrowers to obtain liquidity at a fair rate. It is based on Lombard loans, the granting of credit against pledged items, or in this case, crypto.
Aave created a new suite of tokens, the aTokens. With these tokens, your stack always increases as interests are automatically paid every block.
Aave introduced the revolutionary concept of flash loans: being able to borrow and pay back loans in the same Ethereum block!
Aave went from $0 to $70M market cap in less than 6 months. They are audited by the top 3 Smart Contract auditing firms: Trail of Bits, Open Zeppelin and Consensys Diligence. There are 163k+ token holders.
Aave will soon introduce staking for $LEND holders, allowing them to get a share of the protocol fees.
Q — Alexandre R from GAINS: Can you tell us what you did before crypto, how you got into crypto, and if you’ve had any other venture in crypto previous to being involved with Aave?
A — Marc Zeller from Aave: Before crypto, I was into “data science” for Rentrak a company specialized in analyzing audiences of movie theaters and many media. Crypto for me, as for many, was Bitcoin. The Decentralized Peer To peer Cash system described by Nakatomo was a game-changer.
I first heard about Ethereum from a friend in 2015 and my first reaction was “oh nooo another altcoin” because I was still remembering the altcoin bubble with many bad projects launching their own blockchain, and was not a big fan. However, my friend insisted and that was basically the beginning of my main occupation, first as a hobby with crypto-onboarding meetups groups like Ethereum France. Then I joined Consensys to create VariabL (proto-DeFi project of stablecoin). Later, I joined the French Broker Coinhouse as an analyst. I’m really happy to work for Aave on our protocol since 2019.
Q — Alexandre R from GAINS: Can you tell us what your role is at Aave?
A — Marc Zeller from Aave: I’m the Integrations lead of Aave. My job is to make life easier for third-party developers that want to provide DeFi features for their users. For example, we have been integrated yesterday on Argent wallet, allowing anyone to earn passive income without a transaction fee and in one tap.
Q — Telegram user POLTU: Why is the name of the project Aave and the ticker ‘$LEND’? Any specific reason?
A — Marc Zeller from Aave: AAVE is the rebrand of the former p2p lending platform EthLend, we will change the ticker to AAVE in the next few weeks with the introduction of Staking.
Product
Q — Alexandre R from GAINS: Can you tell us what the project is about in a few simple sentences? Please try to make it as simple as possible for us peasants. DeFi can be hard 😛.
A — Marc Zeller from Aave: DeFi is based on the innovative Blockchain technology and smart-contract architecture, but it all boils down to some pretty known principles of finance: Lombard loans (XIIth Century!). It’s the granting of credit against pledged items.
For users, it’s a way to earn a passive income and for borrowers a way to use their assets to obtain liquidity at a fair rate, without middlemen taking commissions and on their own terms!
The main purpose of DeFi is to return ownership of their own money to the users. You are free to use your assets as you want. You have full control and don’t have to share your gains or trust middlemen.
Q — Telegram user Maximar: What do you mean when you say that Aave is an Open Source and Non-Custodial protocol?
A — Marc Zeller from Aave: We’re non-custodian because you remain, as a user, 100% in control of your funds all the time, you can deposit, withdraw, borrow, repay when you want and on your own terms. Your assets are only deposited in a smart contract. We have zero ways to interact with your funds.
Q — Twitter user DESIGNER GRAPHICS: Compound has recently announced that they are moving to a DAO. Is this something that AAVE thinks is good for the sector? If so, is moving to a DAO an eventual goal for AAVE?
A — Marc Zeller from Aave: We are a decentralized protocol, so obviously our decisions should also be decentralized. The Aave protocol is owned by the 163+k $LEND token holders and we will launch this month in partnership with Aragon DAO our governance. Token holders will decide on their rewards, new token listings, risk parameters, and so on.
Q — Alexandre R from GAINS: 163+k token holders? 😳 Must be close to the top of other cryptos.
A — Marc Zeller from Aave: As always don’t trust verify
Q — Alexandre R from GAINS: How did you make sure the token holders will globally vote for what’s best? I’m sure there must be some different incentives for different people? Is there some game theory involved? As a concept, I’m still not sure if DAOs are the best. Involving everyone is cool but there are also clear disadvantages with the time needed to make decisions for example.
A — Marc Zeller from Aave: We have “holders” voting in the stock market since the 17th century at least (east Indian company) so far so good. I believe that holders can make the best decisions based on aligned incentives.
Q — Telegram user Ross: How much is the percentage of interest earned daily in Aave? Does it change depending on the coin or the amount of it?
A — Marc Zeller from Aave: It depends on the assets. You can check all rates and the average rates on Aave.com if you scroll down or on this third party website. Here is another very good resource.
Q — Telegram user Joxes: There is a gap between interest on savings and interest on loan. What happens to the remaining money?
A — Marc Zeller from Aave: We do not take any commissions or fees on the depositors, it depends on the utilization rate of the asset. Let’s do a simple example. There’s a pool with 100 DAI on Aave (much more IRL 😅) and 50 DAI borrowed at a 20% rate. 50 are not borrowed but ALL depositors are paid. So everyone will get a 10% yield on their DAI on Aave. Every depositor is paid.
Q — Telegram user Alice: Why is it better to hold an aToken, than the proper token it is backed in? What are the benefits for the user?
A — Marc Zeller from Aave: When you hold aDAI, for example, you have a USD-pegged token that always increases in value. It is okay to spend it as it’s a stablecoin, but it’s super great to receive as you get more and more over time. I think having aDAI is a great tool to have to resist the inflation on FIAT currency.
Q — Telegram user binance trustbison2.crypto loyalist: Is the Aave DeFi solutions privacy-based?
A — Marc Zeller from Aave: Privacy is one of the main features of the “p2p cash system” I signed up for years ago. I’m happy to reveal that we’re working with AZTEC to bring to Ethereum, the ZK-aDAI, a private, interest-bearing stablecoin.
Q — Telegram user Dron Kutsenko: Ease of entrance/adoption barrier is always tricky for onboarding new entrants to blockchain. How easy and INTERACTIVE is your UX/UI?
A — Marc Zeller from Aave: The best Part of Aave is that you don’t even have to interact with our UI/UX to earn interest. Buy directly aDAI on Transak with fiat and you have a direct path from Fiat to yield in one click. Also, you can use Argent Wallet to interact with Aave without ever visiting our website. That’s the cool part about decentralization. We don’t have to be a walled garden. People can have many paths to our services.
Q — Telegram user Isam Mery: What are the requirements for a coin to be listed for savings and loans? The interest rate is a market signal, what signal do you think this rate shows us in relation to the general feeling of the ecosystem?
A — Marc Zeller from Aave: We have a transparent risk framework here. We will partner soon with Kleros.io to curate the token listing proposal and add new tokens to our platform.
Q — Telegram user Milton “Rockstar” Friedman: Can this DeFi be reproduced on other blockchains?
A — Marc Zeller from Aave: We are 100% open-source so I don’t doubt we will have an AAVE clone on TRON one day. What you can’t copy/paste is the network effect, the rate of innovation, synergies with the other protocols. The dForce hack with lendf.me taught us also the hard way that you can’t copy/paste the best security measures.
Security
Q — Telegram user Elly ♂️: How is Aave coping with the vulnerability of the Eth platform based projects?
A — Marc Zeller from Aave: Security is and will always be our top priority. We have a big bug bounty budget for the white hackers and we are audited by the 3 top smart-contract auditing firms: Trail Of Bits, Open Zeppelin, and Consensys Diligence. We have the policy that not a single line of code unaudited should interact with our users.
Q — Telegram user Mishra Sanjay: Where are the collateral or funds stored or used by the Aave protocol? How secure is a user’s fund in the Aave protocol Platform?
A — Marc Zeller from Aave: All funds are stored in the LendingPoolCore smart-contract. Everything is auditable, transparent, permissionless, and on-chain.
Finances
Q — Telegram user Jerry: How will Aave attract more funds from outside the crypto space?
A — Marc Zeller from Aave: We raised around 18M$ in crypto before the main crypto market bubble. Our funding is secured for several years.
Business Development
Q — Telegram user Sasha Ivanov: Ether 2.0 will be released very soon. What do you think about this? And how will this affect DeFi and your platform in particular?
A — Marc Zeller from Aave: ETH 2.0 is really important for DeFi as currently one of the main bottlenecks for adoption is the high transaction fees due to network congestion. I believe layer2 solutions and ETH2.0 will help Ethereum grow.
Q — Twitter user #JunkTerrorBillNow: What are your strategies in building a big and strong community? Do you agree that the power of the community will lead your project to grow globally? What are the services you offer to the community?
A — Marc Zeller from Aave: In DeFi, the main focus is not competition. All our code is open-source.
A focus on synergies as actually a better recipe for growth. Allowing users of the Uniswap protocol to use their Liquidity tokens on Aave doesn’t hurt Uniswap at all. It’s the opposite because Uniswap users can now leverage their positions thanks to Aave. So our strategy for growth is the “Money legos” build bridges with other protocols and communities to create new interesting (and profitable!) ways to make money.
Our main goal is to turn DeFi from a 1B$ market into a 1T$ market by helping the main actors to grow together. That’s probably the main reason why we went from 0$ to 70M$ market size in less than 6 months 🚀.
Q — Twitter user KadalMesum: Which area does Aave focus on at the moment and which products/projects are you developing to support it?
A — Marc Zeller from Aave: Our roadmap is full of new products. We will launch this week the Uniswap market, allowing Uniswap liquidity providers to use their assets as collateral on AAVE. The next one will be the Tokensets market. Our focus is to create community-oriented markets allowing us to test new things and create innovative financial products. We’re also building bridges with other blockchains such as Bitcoin and you can expect big news on this in the next few weeks. Also, we worked hard on V2 of our protocol with completely new features that we hope will have at least the same impact as flashloans. So more markets, new features, a new version, governance new tokens. and that’s just for the next few weeks 😂
Also we will introduce the staking on the LEND token, allowing LEND holders to get their fair share of the protocol fees!
Marc, thank you for coming in today, it was a pleasure to learn more about Aave. I really like your vision of growing the whole DeFi ecosystem by offering products that benefit multiple parties with great synergies.
I’m looking forward to the Uniswap and Tokensets markets, as well as the Bitcoin bridge!
Keep us updated on your progress, as long as you can make it easy for us to understand 😉
Where can we go to follow Aave? — Alexandre Raffin from GAINS
Thanks a lot for inviting me! We’re super active on Twitter and you can follow me for the latest info too. Our blog is also a great resource. Join the AAVE fam on Telegram too! — Marc Zeller from Aave
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