Speaking at the EthCC conference in Paris, Ethereum’s co-founder and lead developer, Vitalik Buterin, urged the Ethereum community to innovate beyond the boundaries of decentralized finance.
Describe non-financial gains as “the most interesting part of the vision for general purpose blockchains” Buterin complained that financial applications are currently “dominating the Ethereum space”.
• To be defined by DeFi is better than to be defined by nothing. But it has to go further.â ????
Buterin outlines various non-financial uses for Ethereumincluding decentralized social networks, identity verification and attestation, and retrospective funding of public goods.
“Going beyond DeFi doesn’t mean being against DeFi. Actually I think that […] the most interesting uses of Ethereum will combine financial and non-financial elementssaid Buterin.
“Maybe in a few years we will have a lot of really exciting things […] that offer very different and real value to all kinds of people, not just within the Ethereum ecosystem, but goes much further, “he added.
Buterin has already started funding public goods. In a July 21 blog post co-authored by Buterin, Layer 2 Scaling Solution, Optimism, commits to funding open source development through a retrospective reward protocol, Optimism, which maps all of the benefits generated by the sequencing to the initiative.
Buterin attributes the Ethereum community’s concerns about DeFi to two main factors.
First, Vitalik noted that “finance is just the area where centralized technology sucks the most,” and concluded that Finance offers greater dominance for decentralization than other centralized industries:
“I can send you a centralized email and you will get it in a second. And sure, several intelligence agencies can read it, but at least you can read it, and at least you can read it in a second. International bank transfers don’t work that way “.
Buterin also highlighted the prevalence of high fees to push the sector towards financial applications., Annotation:
“Degens can pay for it, monkeys can pay for it, orangutans can pay for it. But if we’re talking about a decentralized social network where every tweet becomes an NFT, that can’t work when you have transaction fees of $ 5.22.
But that’s what Buterin offered the challenge of high transaction fees “is now being solved by Ethereum’s growing ecosystem of Layer 2 networks”..
As work is currently underway to reduce transaction costs at Ethereum, Buterin says now is the time to look into how Ethereum can be used to address other issues.. He stated: “The Ethereum ecosystem must go beyond the production of tokens that help trade other tokens”.
“If you just take that small thing that is DeFi and keep it going to infinity […] You will only receive tokens that give you agricultural income from other currencies which are financial derivatives alongside other tokens from income agriculture, ”he said..
Although it should be noted that there is some value in financial derivatives in the sector, Buterin warned of the systemic risk of complex derivative products and concluded: “Let’s not just do DeFi”.
â ???? These things are valuable until layer one and layer two […] but once you get to shift six you actually increase financial instability and the risk of all of this collapsing. “