Ethereum (ETH) is more than decentralized financing (DeFi) and the focus on price, argued its co-founder Vitalik Buterin. According to him, it is primarily about utilities and the development of decentralized services, which ideally combine both finances and non-finances. Vitalik Buterin. Source: A video screenshot, Youtube / Grand Amphi Théatre
With Ethereum and projects that are built up from different blockchains, it’s not just about the price, as can be deduced from the current events around DeFi. Rather, the goal is to have a crypto space with more utility, more projects and ecosystems that continue to build different types of utility, said Buterin in his presentation at the EthCC conference in Paris July 20-22.
Today Ethereum has mostly finance – the general perception right now is that it is defined and dominated by DeFi. And that is not “bad”, stressed Buterin, adding that this is not all that Ethereum is trying to do.
He stated that the vision for Ethereum and much of crypto beyond “has always been to take decentralization, trust minimization and experimentation with mechanism design well beyond finance”.
This is probably the most interesting part of the all-purpose log chain vision.
At this point, according to Buterin, there are two main reasons DeFi is so dominant:
- Finance is where centralized technology “sucks” the most; as “centralized other things”, which also have problems, continue to increase, these problems also become more important;
- Transaction fees have been high, and while some can pay for them, there are areas – like decentralized media – that can’t work with high fees.
The fee problem is currently being resolved, argued Buterin, and again named rollups as one of the solutions, in combination with sharding in order to further increase scalability.
Therefore, now is the right time to think about other things, to build on Ethereum and to go beyond DeFi. Interesting non-financial creations already on view include non-fungible tokens (NFTs) as well as ENS names, which are technically also NFTs.
According to Buterin, if you look at what to focus on in the short term, there are two goals that must be achieved for new projects:
- Alignment with values: it has to be something the community can get behind;
- Alignment with needs: it has to be something that is useful.
Building Ethereum’s social media ecosystem is one of the most important things to focus on, according to Buterin, as crypto can solve a number of key problems that plague centralized social media: It brings up credible neutrality and censorship resistance, among other things the table.
Another thing is using Etherum login to log into other services like Google or Twitter allows. However, these centralized login providers are “worst of both worlds in terms of centralization and decentralization,” Buterin said. On the flip side, Ethereum logins, which are social recovery wallets, can potentially outperform both centralized and decentralized providers in terms of both self-sovereignty and better account recovery.
Decentralized content, prediction-market-like mechanisms, decentralized Sybil resistance and community-focused forums are “directions to explore” according to Buterin.
Another set of ideas that Buterin said he was excited about is retrospective funding of public goods, where the idea is to create a decentralized autonomous organization (DAO) that will assess which projects are retrospectively for the goals were valuable to a community.
“The Ethereum ecosystem needs to expand beyond just making tokens that help trade other tokens,” Buterin said. “These things are valuable until layer one and layer two, […] But once you get to level six, you actually increase the financial instability and the risk of this whole thing collapsing and potentially pissing off some regulators. “
He urged the community to “not just do DeFi”. Going beyond that doesn’t mean opposing it. Rather, according to Buterin, “the best applications combine financial and non-financial elements”.
At 11:29 UTC, ETH is trading at USD 1,981. It’s up 4% in one day and down nearly 1% in a week. Overall, it appreciated 708% in one year.
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Learn more:
– Vitalik Buterin makes a curious cameo in Kutcher and Kuni’s ‘Krypto’ video
– After bashing yield farming, Buterin offers a “billion dollar” DeFi idea
– Ethereum goes to London in August but some changes will have to wait
– DeFi had a strong 2021, driven by new trends and paradigms
– Why Ethereum Is Far From “Ultrasonic Money”
– The Ethereum Economy is a house of cards
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