Stani Kulechov on: saving six months for a computer, dropping out of high school, and building AAVE

Our next speaker needs no introduction. — Hey. — How's it going? — No. — Actually, my dad saved for um like saved for like a half a year to buy the computer because it was so expensive. People were like very confused. They thought it was a bad idea. — What were you like as a kid? — Now the whole Ethereum works on collateralization. — You're a prolific angel investor. You have a worst investment. Can you play to continue the game? — That's a good question. — Cool. So, we're going to play Jenga here. Yeah. — And there's some questions associated with it. So, uh if you want to make a first move, we can you can get started. — Okay. Let's see. Uh 31 was my — Okay. Uh jersey number in ice hockey when I used to play. — Yeah. Um, you play ice hockey a lot before? — Yeah, for 10 years. — Oh, wow. — Yeah. — As a kid, like for like professionally — Well, basically it's the national sport in Finland. So, — yeah. — And I went to uh sports high school and um — No way. Awesome, man. What were you like as a kid? — Um describe yourself. — Wild. — Yeah. — But still kind of like nerdy. — Uhhuh. — Do you like So, but you played um like sports growing up, I guess, and in Thailand. So you born and raised in Finland itself. — Cool. — And I think it was 1997 when I got the first computer. — Okay. — And that kind of like changed my course. Uh — do you remember the first thing you did online or on a Google? — Uh yeah, it was like a some sort of like a page like a like directory like yahoo. com. — Uhhuh. Okay. — That I went to. — Yeah. — That was before like search engines and like I just had like — How do you even find it? just like um I mean the way you install the internet you go to like a like either a floppy disc or like um like a CD — and then you also have like the hyperlinks where you had to go. — So everything's much more easier now. — Yeah. Slightly. — Were your parents also in tech or like how did that happen? Because you were pretty young and — Yeah. No, they weren't in tech actually. My dad saved for um like saved for like a half a year to buy the computer because it was so expensive. — What do your parents do? — Um they basically my mom is a nurse uh and my dad is in logistics. So they're very kind of a blue collar um hardworking people. — Yeah. How what were their reaction when you like as you got more and more into tech? Like what was that world like? It feels different. — Yeah. I think my dad always wanted me to do tech because um — you know he saw the like importance of like computers and um — and also internet was slightly coming up. — Yeah. — Um — and also like remember like kind of um libraries used to have computers like that was the like first places and — and talking about that. So uh they're kind of actually like um really supportive to be honest. — Yeah. How um do you explain to them like what you do and are they like familiar with DeFi now like what's that — so separate? — Yeah, my parents take a — Awesome. — Yeah. So nice. — And they use Har as well. So that's pretty nice. — I think they have a quite a good understanding but I think they also like suffer from like the lack of access to DeFi at the moment. — Um it's still hard to use and I think that's something that will change in the future. So you would you say a lot of it feels personal. — Yeah. — Like what you're building and so you you've seen direct how it can be helpful. — Totally. And I think uh internet and computers gave access to information — like you didn't have to go to libraries to learn something or ask your parents or your friends. — Yeah. — You know like the amount the limitations of information was really constrained. — And with the internet like you could access any information like you didn't have to even buy books. — Yeah. and Wikipedias and all this kind of like a public uh public goods help you know help to educate people as well. So, so I kind of grew up on online. — Uh, and I think decentralized finance is doing the same like what internet did for information but for financial like money and financial uh infrastructure creating access for everyone for equal — um financial opportunities and also access to finance in the future. So you were in Finland in 1997. You discovered the internet through floppy discs and hyperlinks and things. Oh yeah. Um and then you know you went on and then for me now there's a gap cuz now I know that and then I know you have founded the most successful D5 protocol uh in the world uh which is now has its own app and everything. I'm curious what happened in between like what was that after you discovered the internet? You know you said ski ice hockey as well. Yeah, I mean I was always into sports and um because of my

parents and they really uh encouraged to do a lot of activities and um and the rest of the time we spent like online playing games and Counter Strike uh that was something we played all the time and — um I think I started to program when I was 13 um — and did that uh quite intensively during high school and I think I dropped out uh after first year of high school to just program full time. Yeah. And later when I wanted to go to university, I had to go back to high school and finish it to get to uni. — Yeah. — And um in my early 20s, I was um building uh fintech applications where the whole marketplace economy started. So — Okay. — That was like um kind of a peer-to-peer lending, crowdfunding um marketplaces. — Um and that was really kind of like a first time building financial uh applications. — Yeah. an end of my university, I started to learn more about Ethereum and realized that this is actually like a perfect substrate to build accessible products um build once and like distribute um everywhere. — What was that early days of discovering Ethereum like when you first started? — Very uh complex, very um uh hard to understand um but also like hard to like u put different things together, — I think. Um that was the time when Ethereum had um DeFi wasn't a like a thing like DeFi didn't really exist. Um stable coins didn't exist on Ethereum. So it was a really um early applications and um — a lot of like lotteryies uh um lot of like games um in very early uh days and gas was super expensive as well. — Yeah. How um you know I guess like in those days — you're probably going conferences, hackathons and things like that like how important were the early relationships that you made and like you know do you have a first friend in crypto that you think of fondly — or think of often? — I think a lot of friends actually and I still see a lot of uh people that I saw in 2017 and uh 2018 — uh even here uh today. It's actually quite — fascinating how large like the community became over the years. — Yeah. Yeah, but the first Ethereum events were like um you know a couple hundred people um and grew to like a few thousand people. So yeah, — and this is the most enthusiastic people that actually travel to these events and participate. — Um you know speaking of events, you guys organized RAV, one of the most successful hyped up things in any conference in Ethereum. Um and you know that kind of like it's very it's clear that culture is very important to you. It's clear that art like from the way a is designed to things that a throws and all that like why is that like what part of your life influenced that slash like — how is that your interest? — Yeah, I think culture uh dictates everything um if you get the culture level right um you can affect all the lay all the layers um above. — Yeah. Um, and I think it's important to have a really sense of community. Um, oh, that's a nice uh nice one. — Have a good sense of community um around uh what we're doing because um it's a very like a value based u uh project. So, we believe in in freedom and what decentralized finance can do for a lot of people, empower them. — Um and building around a community of like-minded uh individuals really brings everything together. Um and also rabies are the way to also like celebrate and give back to the community. Uh and brings like a kind of a strong sense of belonging. — Yeah. — And I feel the same way about the Ethereum and the Ethereum ecosystem. There's a lot of uh a lot of people here because they share the same values and also see where um where the technology could be used and how it could benefit uh everyone. Um, where were you when you named A and how did the name A come to come about? — I think I was uh in Switzerland in one of our like the first offices we opened for — for a — um and I remember we were looking for u kind of like a name that represents what we do. Um, and we were looking for Finnish words — partially because of my background, but partially because it's probably the least used uh dictionary when it comes to naming companies and projects. So um yeah at that time um uh a seemed really interesting because uh it means ghost in Finnish and uh typically these protocols operate by themselves automatically and we are kind of like the ghosts uh behind the scenes and — and then that resonates uh a lot that and also transparency. So — the transparency aspect is important on in in our way. — Yeah. Um but yeah, it also felt fun like it if if you build uh the next generation of uh you know something that

is going to be bigger than JPM and all of these uh bigger uh biggest banks and networks. Why name it something you know serious where you know you don't have to pretend and create trust because you can create something that is trustless and prove itself as well. It's clear that your roots match matter a lot to you from the name of a to the story of what motivates you as well. Yeah. Um and you know you mentioned you're from like a smaller town in Finland itself. Yeah. and you've now gone on to build a and this now you're competing with JP Morgan and one of the most collateralized banks in the world and whatnot, right? Um what is that like you know if you were to tell other people today who maybe where you were when you were 16, 17, 18 um what do you think is are core lessons that helped you that you wish more people could know about if they're in a similar position? Yeah, I think um one important is to kind of uh I would say kind of um having like long longevity for uh for ideas and thinking about like you know what's what like how do you kind of like bring net value and typically like um in a uh infrastructure uh play like Ethereum and our ecosystem — it's important to think about like what's what will be the next step after kind of um how do we get the technology to adopt? How do we build products for um users that are not in the space and how do we grow net new value and users? I think um thinking towards all the way of uh end users, we can learn that there's actually a lot of problems in between — um the users where there are today and where Ethereum is. — Yeah. — Um and obviously — yeah. So I think uh it's important to kind of like a think about like what not what the space our space is looking for but what do the the users that are outside of our space are looking for and how we can solve those uh problems. — How do you differentiate between JP Morgan and a — yeah a as a protocol it's a network so it actually connects the JP Morgans of tomorrow. Um and as the network scales uh the benefits for the participants increases by increasing liquidity uh decreasing liquidity risk uh making borrowing cost lower increasing demand and that increases supply. — Yeah. — Uh so overall there's a good feedback network there. Um so I think it's something that all these uh institutions can plug in into the in the future. — Awesome. Um you mentioned you know your parents just use a Uh well you mentioned that your parents are also using a but you also mentioned like previously there was like some D5 friction in the UX side. Yes. Um you guys just announced an app. — What is the motivations for that and where do you see that kind of usability side going? Yeah, we think that DeFi has grown significantly in the um in our kind of industry, but most of the users still lack of access uh to DeFi and simply um there isn't simple experience um for D5 where you can actually move your funds from your bank accounts into — Yeah. — with the least possible friction um and most straightforward uh oning. So that's why we built the A app. Um and I think that's a really powerful offering because it's a way to onboard all the um users that are outside of the space at the moment and going directly to the consumers. — Totally. Yeah. I mean it's super exciting. My parents use DeFi quite a bit now and it's still a grind. Like so my actually the sad thing is my dad got hacked um really of an airdrop from like scam. So we've already kind of fallen into some of those things but you know — so that's an example why we need better access like better access also means uh better security so how do you ensure that users don't get compromised by um any of these kind of like a fishing attempts and how do we do it better uh than in the kind of like traditional internet world — so I think that's part of it so how do you secure how do you provide uh ease of use at the same time Yeah, — solving this is important because we can't rely on a process where users are losing their funds as a first-time users. — It won't be scalable. — Um when you were starting out on a ETH lend at the time, right? — Did you get immediate validation or were people like what is this? This is like doesn't make any sense and if that was the case like how did you keep pushing? Yeah, I think when I launched uh Eland, I um I wrote this like a nice post on Reddit like basically what I built — um and I shared it on um Ethereum

Reddit which was before crypto Twitter existed. That was the place to uh to basically share ideas and and in progresses and whatnot and also Bitcoin uh Bitcoin talk as well — um as a forum. So I shared this post and it got completely um slashed there. Um people came and were saying why would you ever you know use Ethereum as a collateral? Why would you borrow against it? Um — you know people were like very confused that it they thought it was a bad idea. — Yeah. — Got a lot of downloads. Um — yeah now the whole Ethereum works on collateralization. Yeah. — Um, — so it's a great example where you know like — people won't necessarily won't get it in the first place without the proper like content and education. — Um, but it doesn't mean that the idea doesn't have validation. — Yeah. — Sometimes the idea can have validation but the execution is poor. — Yeah. — Uh, so there's different components that is important to Janelle um everywhere. So yeah, that was a little bit uh confusing to me. Um but I kept just like thinking, kept like uh improving the product and um I think that was the right path. — Yeah. — Um you it's been like almost a decade. — Almost. Yeah. — Almost a decade. You're still here. You're still showing up every single day. I feel all you're still not at all. You're still running around going around the world meeting people. Like you're very much still active. You're very much in the zone still. How much does that matter to you? — It matters a lot. Um because also like I've seen the community grow and directions and I have also like strong opinions about uh what we need to do as a community and also I want to be here because I want to help other people as well and you know get their projects out um and give them advice. — Yeah. — And at the same time share what we're uh building and what's our vision in the space. Um and hopefully that helps to to a lot of newcomers as well to navigate. Um I think that's also great that we see a lot of uh friends here uh that has been coming uh year after year. — Um it it requires a lot of uh energy obviously to uh prepare for the whole week and participate but it's really worth it. — Um you're a prolific angel investor. Um you got doxed campaign recently, right? Um — what do you look like when you're looking for new builders to invest in and be like, "Okay, like this is someone that I can trust. " What — are there characteristics or things that you look out for? — Yeah, I think um first that I look is is definitely like the team and uh and the founders and kind of like um trying to assess the uh understanding of the problem that they're trying to solve. — Um and also uh try to understand like the execution. — Yeah. and then also the actual problem that they're uh solving or the product they're building. — Um and combining this together and also timing is quite important. Sometimes um the timing isn't right but you might want to invest uh regardless because um you know you want to you want to progress as a particular category for example. — Do you have a worst investment? Not really because um there's always some value there um invest in investments uh you learn quite a lot um you progress uh the space — um and and typically you create a lot of talent as a output. So sometimes the investment doesn't work but then um the same team might go and start another company where they have more experience and might be more successful. So, some [clears throat] are more successful than others. — Um, but in overall like they're all like kind of like bets that we're uh confident in. — Yeah. I think what's uh my one of my favorite stats in crypto is actually like there's always this thing where how many people have joined crypto, how big has the users grown. I care a lot about how many people stay and as long as we continue to have that number go up, I think we're still getting somewhere no matter how things pan out in the smaller company or your startups etc. Yeah. — I think that's amazing metric because everyone thinks about the uh the acquisition uh but very little on retention. — Yeah. Whereas typically now um in kind of like the on the acquisition side people think typically traditional now more about retention. — Yeah. — Than acquisition. — So I think it's a great thinking um especially because it highlights also like why people don't get more engaged — typically it's because there's lack of product that might be engaging for these users.

— I think we've been focusing a decade on infrastructure. — Yeah. And I think the application layer is kind of like the next decade where a lot of focus will be on and that will help us to scale the uh user bases. — Yeah. And uh like crypto as a field is constantly been seen as such a volatile thing. It's like bare market bull market. — Um a is like counter chapat, right? It's actually it's just use a just be steady throughout. — How do you view that? like what's you know especially as crypto gets more and more adopted as you go and speak to institutions and things um and teams like that like — how what is that insight uh like for you — I mean in some ways our product is market neutral so uh there's a need when the market cycle is going up uh people tend to use a to leverage or markets are going down they tend to unlock liquidity without selling their assets um and most of the users are just supplying stable coins So they are not kind of like um interacting with the volatility. — Um and then with the inst institutional assets like the horizon market that we launched — um where you use tokenized assets to battle those assets are market neutral. So they don't have any volatility. Can you explain what RWAs are and what Horizon is? — RWAS are simply um just traditional uh assets uh money market funds, credit funds that are tokenized and and um they have digital twins on the blockchain. — And um that representation then can be used uh within DeFi — using as a collateral in a to borrow stable coins for example. — So you will have 247 access to liquidity. It's great for borrowers because they can access liquidity at any point. It's great for lenders because they can lend against traditional assets but doing that onchain with uh stable coins. So I think for um institutions realizing kind of like the benefit of stable coins and also tokenized assets that helps to them to think outside of the the volatility and thinking that crypto is purely about volatility. — Yeah. Awesome. I mean, I think like for Ethereum, one of the things that I feel pretty passionate about is that it's a trust layer. — Yeah. — And protocols like a show the trust in action in the real world. — Yeah. — Like it's lend borrow backed by the economic security and the weight of trust that comes with these platforms. — Exactly. — Um and then the globalized aspect of that. Yeah. I it's it just makes so much sense. It's cool to see all adopting that. And I think um and the trust comes from the consensus that people trust the a kind of like a preed process that there is no collaterals or asset that are — basically has some sort of uh um risk that could materialize uh at some point. Um trust also that there's other developers that are reading the code bases and that's a risky move. — I know it's getting riskier. Um and that's kind of like the consensus of trust is what um makes it kind of like a strong and having these different stakeholders that contribute to the a ecosystem and ensure that — um the protocol is uh protected. I think that's a big thing the same way as the nodes on Ethereum are protecting the Ethereum as a network. — Um what is something about you that the internet doesn't see? Um maybe it doesn't see I think um Oh — wow, that was great, man. This is you left me in a hard spot here. — Yeah, it's this is a tricky one, right? — Um yeah, what's something about you the internet doesn't see? Well, obviously it doesn't see how kind of like a much work it goes into what we do daytoday. Um, I think a lot of things are taken from like face value. Um, but also kind of a, you know, I think it has to be a fun process, right? So, uh, that's a good move. you know, building has to be a fun process that you know, you shouldn't be here if it's like uh overwhelming or um you know, you should be here to kind of like en enjoy doing what you do basically. — Um — and we're having a lot of fun uh to be honest and — um Graz is a great example how to have fun. I mean it's just unreal to me that like the same team that is going and changing what modern finance would look like it's what the 30th largest bank in the world not considering collateralization it's probably higher um is also doing ra like it proves that you guys are actually you're bringing the crypto culture into the next gener finance — and you know you're not really forgoing the same — community and the culture that brought

you towards this world — yeah it's very powerful — it's a new world of finance It's like and new rules. I think uh because there's no need to trust um centralized asset managers or centralized banks, you have a completely new level playing field. Uh and I think that's really amazing. I think you're uh yeah, that's a hard one. — Hold on. Let me try something here. Oh man, — found a really easy one. — That was a good one. — Um, what recent decision made your project better? — I think a app. — How so? — Just focusing on like simplicity. The simplicity scales. Uh, and I think we're very energized about that direction. Um, and just bringing more DeFi to mainstream — and doing it the right way where everything is abstracted away and it's simple and easy to use. — Awesome. Um, what makes you feel most alive? — That's a good one. — Sorry. — What makes you feel most alive? — Um, most alive. I think having a balance in life is good. — Enjoying the things that you build. um and kind of like seeing the results and how you know people engage with the products. That's the best thing. And then working with great people, I think — having great people in your team and having really um amazing stories and being able to uh to contribute to something like uh greater and bigger is something that I really like. Um, and sometimes it's as simple as like uh you know having beers with your uh teammates, you know. — Mhm. — That can be really uh uh like a really uh good experience too. — Yeah. It's underrated. I think like it's important you've kind of stressed throughout this time of like you have to have fun while doing things. — Exactly. — If you're reinventing finance, you have to have fun while doing it. It — Exactly. — It's also it shows why you're still in the game, why you're still here, what you're still charging for, why it's only going bigger and bigger. obvious only literally growing uh constantly. It resonates in the way that you approach this. — Yeah, — I think agree. — Is that um is that something you learned in your childhood? Like what do you think makes you like that as someone who kind of aspires to have fun while doing even the toughest work out there? Yeah. I just like the like doing things that aren't like I don't like the element of seriousness. — Yeah. Like I like the seriousness of uh getting things done but I like the fact that you know you have to have fun in life you know fun in work and and simply um and you have to have that freedom and I think I had a lot of freedom when I was growing up and that kind of like um created experiences that I otherwise wouldn't have and also was able to um you know have more fun than uh I would if it if will be more like stricter. So — and I think that's something I I'm thinking always like how to keep an environment where you know everyone has space to to enjoy as well. — Um you guys chose to be based in London as one of your main headquarters. — Yeah. — Like my turn or — Yeah, it's your turn. Why London? Um and I'm saying this because I had a great time in London and it seems like you guys picked the perfect spot, but I'm curious what your thought was to go and move there. I mean the food is amazing in London these days. — Beans are great. — Yeah. So that's one uh one aspect of that. Um the second is like you have good access to talent. Um a lot of culture and it's a big enough city that's you have everything but at the same time it doesn't feel uh like a concrete jungle. there's parks and there's you know I walk a lot so I like to live in a way where I can of — um you know walk to work and um and overall it's very hard to do in a more like um uh like a bigger city that that's that has less parks for example — um and I just like the European uh lifestyle as well um so London is able to offer everything that I like to — it's a good spot you travel a lot though, right? Like you're — Yeah, — you're moving around. — We did recently. Yeah. — Okay. Should we try speed run this? — It's getting pretty intense. I don't — So I can try something really tricky. — Oh, I just Oh, you got — This is too easy. — You got to do the You can do it. — This one is tricky. — Okay. Oh, man. — Oh, honestly, sometimes it's putting it on the top gets harder. — Yeah. Um

oh, — who's someone outside of like crypto and tech that inspired you either whether it's your leadership style or like you when you were coming up? — Is there something else to mine? — I think uh inside outside of crypto — yeah inside too. Yeah, I think like the um Collison brothers are pretty great founders and really good to kind of like look up to on you know things that kind of like work and how you operate. Oh, that was a — so nice one. — Um — Wow. — Let's try something. Oh man. Wow. I think that — not bad. — Yeah, I think I still think that was going to be hard for you. — Yeah, I think I'm I might be over for me. — Okay. I literally can't pull any There's always one or something that's surprises you. Oh. — Oh, good one. Yeah. — This is the one you didn't pull out earlier. — Yeah. — Thank you. Okay. Oh, no way. Yeah, I think I be over now for sure unless some magic happens. Um, yeah, that's a hard one. — 54. No. 12. No. — Oh, okay. That's my work. Sty a little bit more. Oh. Oh, almost. Nice. — No, it's still there. — I don't know if this is going to last. This might be the most intricate one so far. — Yeah, this is a hard one. Oh yeah, I found one. — No. Oh man. — Yeah, this is it's now it's getting — It's for now it's very hard. Um, was there a time you almost quit? — It's like it's not a it's um Yeah, sometimes. — Yeah. — But um it's kind of like a quit for the day. — Yeah. — Like you know, you just give up for the day to rest and there's always the next day. Especially if you have a something that's hard to solve. — Yeah, — like the puzzle here. Oh, — this is by far the most intricate one of — Yeah. — See, this might be it for me. Unless — Yeah. — Yeah, that's it. How — man world record? — Yeah, I think you got it. No. Oh, damn. Okay. So, as the rules state, yeah, uh you can ask me any question. I have to answer it. — It can be a spicy one. Whichever one the camera has to answer. — So, um maybe I will ask you about Well, what what's the most important thing we need to do as a community as a Ethereum community? — Yeah. — I think we need to talk a lot more about enduser products. — Yeah. — And associate Ethereum as a reason why those products exist in the sense but not dominant. It's not like I think there's a sensitive point here, right? A has gone on and made 34 billion TB plus 50 like — uh and has real users and has this app that's going to now only catapult your growth is significantly more. — It would be strange if Ethereum as a community is like oh Ethereum did that — a did that on Ethereum right and a did that because of Ethereum in different ways and us figuring out how we can actually channel that energy especially within end user products is going to be very powerful. Um I think the A app is the first instance of this in many ways. Um like generally I'm not saying that just cuz you're here like um I'm a strong believer that front ends rule — everything. — Um I think we saw in the past cycle

where the highest generating fees and users were all like front end oriented. Yeah. — Um like Phantom for example, right? And it's true that Salana swaps was a big catalyst for you know not of some people coming on chain for the first time but those people associated not necessarily with the blockchain they associated with Phantom right like download Phantom and make money. It's gonna be the same thing download a — userf facing uh yeah — totally and I think uh we need to do a better job at helping orchestrate that story and like Ethereum's role within it as like use a and save money you can trust that money because it's on Ethereum which is the trust layer upon which this thing is built and like I think that's the sort of stuff that we have to do a bit more of. — Yeah. Perfect. — Yeah. I definitely think um that's the direction to take because we um we built this amazing infrastructure uh on the network layer on the D5 layer and now the next layer is basically like building what works and just distributing to — totally — everyone. So it's D5 for everyone. — Yeah. And like it's I think the majority of the people who discover Ethereum will discover it through these surfaces. — Yeah. Um and obviously there's the other side like technically and protocol-wise like continue accelerating continue making your lives easier for all the builders everything. Uh but I think a very important part is end user product oriented things. It's not hey imagine if this existed it's look use this you can download it now and it's objectively better. — Um and the data shows that too. So — that's true. Sunny honor having so much as usual. — Thank you so much. — That was intense. — Yeah.