Stani Kulechov, the co-founder of Aave, feels more optimistic that their $5 billion DeFi lending protocol’s upcoming stablecoin GHO will solve real-world payment problems. On the episode of Decrypt’s gm podcast, Stani said that he thinks it’s a big issue because, just going back a couple of months ago, he was visiting Buenos Aires, Argentina, and stablecoins are used to preserve value and transact.
For example, Argentina’s national currency has almost 100% inflation, which means whatever you earn as a consumer today, one year later, you have half of that value in your hand, Stani said. Moreover, he said that most Argentinians use centralized exchanges. Stani believes that Aave’s stablecoin GHO will help attract stablecoin users, as it is DeFi-based, so it will be more affordable to process transactions.
Stani said that what he thinks is missing when it comes to stablecoins and what they’ve seen is the progression of scalability of the underlying blockchain infrastructure. He indicated that the AAVE protocol is deployed on Ethereum, Avalance, Polygon, and layer 2s, such as Arbitrum and Optimism.
Regarding layer 2s, Stani said that these layer 2s radically decrease the cost of transacting and using blockchain-based security and inheriting the Ethereum security in layer 2s. He said that he’s thinking and envisioning that we have, for the first time, an opportunity to get stablecoins to be used as Internet money. He indicated that their stablecoin would solve real-world payment problems by utilizing the blockchain.
According to data from CoinGecko, Stablecoins account for $146 billion, 14% of the $1 trillion global crypto market capitalization. This data means GHO will enter a large and competitive market. When GHO launches, Aave will allow users to mint GHO against multiple types of collateral, despite creating a separate vault for each asset.
Stani said that the key difference is that the AAVE community uses the AAVE protocol to create that stablecoin. Moreover, he said that It’s a bit more capital-efficient way of creating stablecoins, but also it creates a bit more diversity in the AAVE protocol stablecoin markets.
Stani also explained the features of GHO, such as its diversity of assets backing, and it will use a wider array of crypto assets to back it.