Aave protocol is the bedrock of DeFi
Vance Spencer is a 30-year-old venture capital investor who is excited by exploring the decentralized finance applications built on top of the Ethereum blockchain. He said in an interview, “The ability to make an insurance company out of 20 lines of code and a bank out of 30 lines of code. When I saw that, that was kind of the light bulb moment.”
As the founder of Framework Ventures, he is also very bullish about Ethereum, saying that the layer-one protocols, such as Solana, Polkadot, and Avalanche, which some crypto traders have dubbed as “ETH killers,” are only staging “ETH attempted murders.” In his view, the vast majority of the “most interesting and novel concepts” are still happening on Ethereum. “Materially, we see Ethereum as the long-term winner in the space in a way that really hasn’t been appreciated by the market yet,” he said.
Spencer’s firm has raised a $15 million fund and in two years, since 2019, the firm has grown to manage more than $1 billion in assets after a further $100 million funding round in May 2021. He attributes the team’s success to its unique investing strategy, which focuses on actively participating in the growth of pre-seed and seed-stage companies. The team also limits their stake to around 5 percent.
He believes other VCs are ignoring early stage companies, and this has allowed Framework to dominate the space. They also like to focus on projects most disruptive potential.
Spencer said, “What that means is that you are really not hunting for a billion-dollar outcome, that would only be a $50 million return if you own 5%. You are really focusing on a $10 billion to $100 billion outcome for these networks.”
The Framework team are looking for decentralized networks that will disrupt centralized crypto services and therefore accrue two to three times the amount of value. It also has another fund that focuses on emerging trends, such as blockchain-based gaming, social tokens, and Web 3.0.
Indeed, Aave, an Ethereum-based borrow, lend, and money markets protocol whose token has surged 467.7% in the past year, is an example of one of the firm’s successful bets. According to Spencer, Aave has become the bedrock of decentralized finance for both Ethereum and other chains.
Creditum will be offering users the option to use either the Compound or Aave protocols when it launches. It’s good to know an expert in this market sector thinks this protocol will go from strength to strength.