Aave’s Stani Kulechov Says DeFi Distribution Model Is Unfair

Aave’s Stani Kulechov, the co-founder of the project believes that the current model for the DeFi distribution is unfair and only benefits people that have money so let’s see what he had to say today’s crypto news.

Aave’s Stani Kulechov thinks that this distribution model has to change. Those with capital will get tokens for little additional effort and then sell them to those without access to the capital. He does believe that the technology is solid. Yesterday, the Ethereum co-founder Vitalik Buterin tweeted that the profligacy of the central banks has nothing on decentralized finance where the protocols have to always come up with value out of thin air to pay the people that have lodged their funds in the smart contracts. Podcaster Matthew Aaron while speaking with Kulechov said:

 “So that sounds like a Ponzi scheme. Is that the correct term to use here?”

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Kulechov answered:

“I think the correct term is [an economy] where the big people basically get things for free.”

The AAve protocol like others too pays out governance token as a reward for people that have deposited lots of money in the smart contract. The LEND token was designed as a governance token that can devolve power from people like their founders to the people that actually use the protocol. In practice, LEND and other DeFi protocols have become fresh stores of value and can serve as a lucrative option for investors. The insatiable market requires more of these tokens all of the time hence the DeFi brrr.

Buterin therefore tweeted the following:

“Seriously, the sheer volume of coins that needs to be printed nonstop to pay liquidity providers in these 50-100%/year yield farming regimes makes major national central banks look like they’re all run by Ron Paul.”

For this part, Kulechov admitted that these tokens only serve the rich as they have deposited more money and will receive most of the tokens:

“The problematic part here is that people who have a lot of funds are basically whales. The smaller [people] are paying for the bigger people. It’s a weird, unfair model that we have now.”

Kulechov thinks however that is underlying technology is what will prevail and that the market will adjust in time. RealT, his latest project wants to harness the power of DeFi for mortgages as he said:

 “It’s important to focus on those projects that are sustainable and are building the future of finance.”