Stani Kulechov on saving for a computer, dropping out, and building Aave

An Offstage interview at Devconnect where host Binji and Aave founder Stani Kulechov play Jenga while discussing Stani's path from a Finnish ice hockey kid to building one of DeFi's most important protocols.

This transcript is an accessible copy of the original video transcript (opens in a new tab) published by Ethereum Foundation. It has been lightly edited for readability.

Growing up in Finland (0:28)

Binji: So, we're going to play Jenga here. There are some questions associated with it. If you want to make a first move, we can get started.

Stani Kulechov: Okay. Let's see. 31 was my jersey number in ice hockey when I used to play.

Binji: You played ice hockey a lot before?

Stani Kulechov: Yeah, for 10 years. Basically it's the national sport in Finland. I went to a sports high school.

Binji: No way. Awesome. What were you like as a kid?

Stani Kulechov: Wild. But still kind of nerdy.

Binji: So you played sports growing up. Born and raised in Finland?

Stani Kulechov: Yeah, and I think it was 1997 when I got the first computer. That kind of changed my course.

Binji: Do you remember the first thing you did online?

Stani Kulechov: It was some sort of a page — like a directory. Then I started to do some HTML. Then I made a website when I was nine. I basically have been just making things on the internet ever since.

Binji: Were your parents also in tech, or how did that happen? Because you were pretty young.

Stani Kulechov: No, they weren't in tech actually. My dad saved for like half a year to buy the computer because it was so expensive. My mom is a nurse and my dad is in logistics. Very blue-collar, hardworking people.

Binji: What was their reaction as you got more into tech?

Stani Kulechov: My dad always wanted me to do tech because he saw the importance of computers. Internet was starting to come up. Libraries used to have computers — that was the first place. They were actually really supportive, to be honest.

Getting the first computer (3:00)

Binji: How do you explain to them what you do? Are they familiar with DeFi now?

Stani Kulechov: Yeah, my parents use Aave as well, so that's pretty nice. I think they have quite a good understanding, but they also suffer from the lack of access to DeFi at the moment. It's still hard to use, and I think that's something that will change in the future.

Binji: So it feels personal — what you're building.

Stani Kulechov: Totally. Internet and computers gave access to information — you didn't have to go to libraries to learn something or ask your parents or your friends. And I think in a similar way, DeFi and crypto are giving access to financial tools. That's what really drives it for me. It's personal because I've seen directly how it can be helpful.

Discovering Ethereum (5:30)

Binji: How'd you end up dropping out of law school and getting into Ethereum?

Stani Kulechov: I was in Helsinki. When I was 18, I was already doing a lot of startups — a few companies on the internet. I was building websites and different businesses. Then Ethereum came along and I read the white paper and I was like, this is going to unlock financial services, essentially. If I can build businesses on the internet and all this decentralized tech, then think about what we can do for financial inclusion and creating financial tools that are accessible to everybody. So that was the main reason.

I started to develop smart contracts and was doing all this work on Ethereum. I dropped out of law school because I was like, I'm going to focus on this full time. My parents were kind of supportive but also a bit concerned about it.

Binji: I think it's important to have a really good sense of community around what you're doing.

Stani Kulechov: We believe in freedom and what decentralized finance can do for a lot of people — empowering them. Building around a community of like-minded individuals really brings everything together.

Building ETHLend and naming Aave (9:00)

Binji: Where did the name Aave come from?

Stani Kulechov: Aave means "ghost" in Finnish. It was like a rebranding from ETHLend. We started originally as ETHLend back in 2017. The idea was simple — peer-to-peer lending on Ethereum. But we realized quickly that the pool-based model was much more efficient. That's how Aave was born.

We're going to be bigger than JPMorgan and all of these banks and networks. Why name it something serious when you don't have to pretend and create trust, because you can create something that is trustless and prove itself?

Binji: It's clear that your roots matter a lot to you — from the name of Aave to the story of what motivates you.

Stani Kulechov: Yeah. And coming from a smaller town in Finland, what I realized is that there's a lot of people that actually are looking for what we're building — both inside and outside of our space.

Aave vs traditional finance (12:00)

Binji: How do you differentiate between JPMorgan and Aave?

Stani Kulechov: Aave as a protocol is a network, so it actually connects the JPMorgans of tomorrow. As the network scales, the benefits for the participants increase — increasing liquidity, decreasing liquidity risk, making borrowing costs lower, increasing demand, and that increases supply. So overall there's a good feedback loop there. I think all these institutions will end up as part of this network.

I shared it on the Ethereum Reddit in 2017 and I got a lot of excitement from the community from the very beginning. That's how the crypto community works. You don't need a business case or a pitch. You just show people something that they can build on.

Security and user experience (14:30)

Stani Kulechov: Better access also means better security. How do you ensure that users don't get compromised by fishing attempts, and how do we do it better than in the traditional internet world? Solving this is important because we can't rely on a process where users are losing what they have, right? I think the most common thing is phishing. The UX of interacting with a blockchain doesn't have validation.

Binji: It's been like almost a decade.

Stani Kulechov: Almost, yeah.

Binji: You're still here, still showing up every day.

Stani Kulechov: Sometimes the idea doesn't have validation. Sometimes the idea can have validation but the execution is poor. So there are different components that are important. I kept just thinking, kept improving the product, and I think that was the right path.

Angel investing (17:00)

Binji: You're a prolific angel investor. What do you look for when evaluating new builders?

Stani Kulechov: First, I look at the team and the founders — trying to assess their understanding of the problem they're trying to solve. Also trying to understand the execution capability. And then the actual problem or the product they're building. Timing is quite important too. Sometimes the timing isn't right, but you might want to invest regardless because you want to progress a particular category.

Binji: Do you have a worst investment?

Stani Kulechov: Not really, because there's always some value. You learn quite a lot, you progress the space. And typically you create a lot of talent as an output. Sometimes the investment doesn't work, but then the same team might go and start another company where they have more experience and might be more successful. Some are more successful than others, but overall they're all bets we're confident in.

Retention vs acquisition (19:00)

Binji: What's a metric you care about in crypto?

Stani Kulechov: One of my favorite stats is actually how many people stay. As long as we continue to have that retention number go up, I think we're still getting somewhere, no matter how things pan out at the individual startup level.

Binji: That's an amazing metric, because everyone thinks about acquisition but very little about retention.

Stani Kulechov: Typically now, on the acquisition side, people think more about retention than acquisition. It highlights why people don't get more engaged — typically it's because there's a lack of product that might be engaging for these users. We've been focusing a decade on infrastructure. I think the application layer is the next decade, and that will help us scale the user base.

Crypto volatility and institutional assets (20:30)

Binji: Crypto is constantly seen as this volatile thing — bear market, bull market. Aave is like a counter to that, right? It's just steady throughout.

Stani Kulechov: In some ways our product is market neutral. When the market cycle is going up, people tend to use Aave to leverage. When markets are going down, they tend to unlock liquidity without selling their assets. Most of the users are just supplying stablecoins, so they are not really interacting with the volatility.

With the institutional assets like the Horizon market that we launched, you use tokenized assets — those are market neutral. They don't have any volatility. RWAs are simply traditional assets — money market funds, credit funds — that are tokenized, with digital twins on the blockchain. That representation can then be used within DeFi, for example, as collateral in Aave to borrow stablecoins. So you have 24/7 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 do it onchain with stablecoins. I think for institutions, realizing the benefit of stablecoins and tokenized assets helps them think outside of the volatility — and stop thinking that crypto is purely about volatility.

Ethereum as a trust layer (22:00)

Binji: For Ethereum, one of the things I feel pretty passionate about is that it's a trust layer. Protocols like Aave show the trust in action in the real world. It's lend, borrow, backed by the economic security and the weight of trust that comes with these platforms.

Stani Kulechov: Exactly. The trust comes from the consensus — that people trust a predefined process, that there are no collateral or assets that basically have some sort of risk that could materialize at some point. Trust also that there's other developers reading the code bases. That's a bit of a risky move — I know it's getting riskier! The consensus of trust is what makes it strong. Having these different stakeholders that contribute to the Aave ecosystem and ensure that the protocol is protected — I think that's a big thing, the same way as the nodes on Ethereum protecting the network.

Binji: What is something about you that the internet doesn't see?

Stani Kulechov: Obviously it doesn't see how much work goes into what we do day to day. A lot of things are taken at face value. But I think it has to be a fun process. Building has to be a fun process. You shouldn't be here if it's overwhelming. You should be here to enjoy doing what you do.

Having fun while building (24:00)

Binji: GrAave is a great example of how to have fun. It's just unreal to me that the same team that's changing what modern finance looks like — what, the 30th largest bank in the world not considering collateralization, probably higher — is also doing GrAave. It proves you guys are bringing the crypto culture into the next generation of finance without forgoing the community and culture that brought you towards this world.

Stani Kulechov: Yeah, it's very powerful. It's a new world of finance with new rules. Because there's no need to trust centralized asset managers or centralized banks, you have a completely new level playing field. I think that's really amazing.

Binji: What recent decision made your project better?

Stani Kulechov: I think the Aave app. Just focusing on simplicity. Simplicity scales. We're very energized about that direction — bringing more DeFi to the mainstream and doing it the right way, where everything is abstracted away and it's simple and easy to use.

What makes you feel most alive (26:00)

Binji: What makes you feel most alive?

Stani Kulechov: Having a balance in life. Enjoying the things that you build, seeing the results, and seeing how people engage with the products. That's the best thing. And then working with great people, having great people on your team, having amazing stories, and being able to contribute to something greater and bigger. Sometimes it's as simple as having beers with your teammates.

Binji: You've stressed throughout this conversation that you have to have fun while doing things.

Stani Kulechov: Exactly. If you're reinventing finance, you have to have fun while doing it.

Binji: Is that something you learned in your childhood?

Stani Kulechov: I just don't like the element of seriousness. I like the seriousness of getting things done, but I like the fact that you have to have fun in life, fun in work. I had a lot of freedom when I was growing up, and that created experiences I otherwise wouldn't have had.

Why London (28:30)

Binji: You guys chose to be based in London as one of your main headquarters. Why London?

Stani Kulechov: The food is amazing in London these days. You have good access to talent, a lot of culture, and it's a big enough city that you have everything but it doesn't feel like a concrete jungle. There are parks and I walk a lot. I like to live in a way where I can walk to work. And I just like the European lifestyle, so London offers everything that I like.

Binji: You travel a lot though, right?

Stani Kulechov: We did recently, yeah.

Inspiration and almost quitting (30:00)

Binji: Who's someone outside of crypto and tech that inspired you, whether it's your leadership style or when you were coming up?

Stani Kulechov: The Collison brothers are pretty great founders and really good to look up to on things that work and how to operate.

Binji: Was there a time you almost quit?

Stani Kulechov: Yeah, sometimes. But it's kind of like a quit for the day. You just give up for the day to rest and there's always the next day. Especially if you have something that's hard to solve — like the puzzle here.

End-user products and the Ethereum community (34:00)

Binji: What's the most important thing we need to do as the Ethereum community?

Stani Kulechov: I think we need to talk a lot more about end-user products, and associate Ethereum as a reason why those products exist — in a supportive sense, but not dominant. Aave has gone on and made billions in TVL, and it has real users, and this app is going to only catapult growth significantly more. It would be strange if Ethereum as a community didn't celebrate that.

Figuring out how we can channel that energy, especially within end-user products, is going to be very powerful. I think the Aave app is the first instance of this in many ways. I'm a strong believer that front ends rule everything. In the past cycle, the highest-generating fees and users were all front-end oriented. Like Phantom, for example — Solana swaps were a big catalyst. People associated not necessarily with the blockchain, they associated with Phantom. Download Phantom and make money. It's going to be the same thing — download an Aave-like front end and save money.

Binji: We need to do a better job at helping orchestrate that story and Ethereum's role within it. Use Aave and save money — you can trust that money because it's on Ethereum, which is the trust layer upon which this thing is built.

Stani Kulechov: Definitely. We built this amazing infrastructure on the network layer, on the DeFi layer, and now the next layer is basically building what works and distributing it to everyone. DeFi for everyone.

Closing (36:00)

Binji: I think the majority of the people who discover Ethereum will discover it through these surfaces.

Stani Kulechov: The other side is to continue accelerating technically and protocol-wise, continue making life easier for all the builders. But a very important part is end-user product-oriented things. It's not "imagine if this existed" — it's "look, use this, you can download it now, and it's objectively better."

Binji: It's been an honor. Thank you so much, Stani.

Stani Kulechov: Thank you. That was intense.