Mining Craze Will Soon End! Aave CEO: Lack of innovation in copycats is stifling DeFi development

Aave's CEO Stani Kulechov stated that while the overall foundation remains solid, the relentless replication without emphasis on innovation in new projects is stifling the development of DeFi.

Most Liquidity Mining Programs Are Unsustainable

Many new platforms in the current DeFi ecosystem choose to release tokens through "liquidity mining" as an incentive for users to engage with the platform. While this method can quickly accumulate liquidity and users for the platform, it does not guarantee the long-term development of the platform. Stani Kulechov, the founder of Aave, discussed the current incentive models in DeFi and pointed out that liquidity mining is indeed an interesting way to reward user behavior such as providing liquidity. Unfortunately, many mining programs offered by protocols are unsustainable, similar to endlessly printing money.

"I believe that this trend will end at some point, and we will see more sustainable incentive measures."

Stani Kulechov further noted that the reward mechanisms of most new projects and even the protocols themselves are copied from some well-known protocols without providing more innovative ways to distribute governance tokens to the community or attract further community participation in protocol governance and development.

"Projects need to think about how to involve the entire community in token distribution."

Replicas Lacking Innovative Thinking

Stani Kulechov's comments reflect the biggest problem in the current DeFi space. SushiSwap is the best example of success in the market due to copying code and implementing liquidity mining. However, it has also sparked a wave of large-scale replication in the ecosystem, with many new projects trying to emulate SushiSwap's model to get a piece of the market.

In this unregulated field, copying and launching a project is relatively easy, but blindly copying without innovation can hardly bring any value to decentralized finance or secure a place in the market. As Stani Kulechov stated, this field is full of potential, and truly innovative projects that provide value have the potential to be disruptive.

When asked about other projects he is interested in within the DeFi space, Stani Kulechov expressed interest in Pods Finance, which focuses on using Aave's aTokens as collateral for options trading, and Aavegotchi, a DeFi and NFT hybrid project launched on March 2.

Additionally, Stani Kulechov mentioned that Aave itself is continuously innovating and breaking new ground. The project recently released the v2 version of its governance model, allowing the community to delegate voting rights, and is exploring layer 2 solutions to address the high fees on Ethereum. Stani Kulechov revealed:

"We will soon release some research results."