Aave Labs founder Stani Kulechov and Ethena CEO Guy Young said crypto finance is only now starting to offer an environment that matches traditional finance: a way to earn more stable and predictable returns, similar to bonds or savings products.
“Most fixed income is like different forms of risk allocation…basically just slicing and dicing and allocating risk,” Young told a panel at the Digital Asset Summit (DAS) in New York. “This area of DeFi was probably the one that received the least attention two years ago.”
Until recently, cryptocurrency users mostly traded tokens or borrowed against them, often chasing high and unpredictable yields. The new tools make it possible to lock in returns, even in a market known for wild swings.
“What Pendle does is offer fixed-rate versus floating-rate swaps,” Young said, referring to a system that allows users to choose between more stable or more variable returns, similar to choosing between fixed or adjustable rates.
This is not easy in the cryptocurrency space. “It’s hard to know what the market will actually look like three months from now,” he said.
Kulechov said Aave helps support this transition by providing a deep pool of capital that other projects can tap into. “Aave acts as a liquidity receiver in a way,” he said, helping “to bootstrap a lot of new products in the DeFi space.”
Currently, most revenue still relies on transactions rather than traditional loans. “A lot of DeFi gains…are still very much based on…leverage,” Kulechov said.
Over time, this may change as more real-world assets are moved onto the chain, a process called tokenization.
“A lot of the gains and a lot of the economic benefits are going to come from traditional finance,” he said.
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