Vitalik Buterin says that money, blockchain systems, decentralized finance (DeFi), decentralized autonomous organizations (DAO), and hybrid applications are the main developments that motivate him in the Ethereum ecosystem. In a blog post from December 5, the co-founder of Ethereum describes his experience using ether (ETH) as payment at a cafe in Argentina:
“When we entered, the owner recognized me and immediately showed me that he had ETH and other cryptocurrency in his Binance account. We ordered tea and snacks, and asked if we could pay in ETH. The cafe owner agreed and showed me a QR code to send a Binance deposit, to which I sent about $20 of ETH from my Status wallet on my phone. »
This visit to the cafe took place last December, when Ethereum was still based on the Proof of Work consensus, so the transaction didn’t really make “pragmatic sense”, Buterin admitted. Network fees accounted for a third of the transaction, and the funds took several minutes to arrive. But, thanks to Ethereum’s move to Proof-of-Stake in September, “transactions are processed much faster, and the blockchain has become more stable, making it safer to accept transactions after more less confirmed.” “.
Then, addressing the rise of DeFi, Buterin wrote that the industry started out honestly, but quickly became an “overcapitalist entity that relied on unsustainable forms of yield management.” However, he said DeFi is in the early stages of building stable support, improving security, and refocusing on some particularly valuable applications.”
Honestly I think we emphasize flashy defi stuff that gives you fancy high interest rates way too much. Interest rates that are much higher than what you can find in traditional finance are essentially temporary arbitrage opportunities or come with untold risks.
— vitalik.eth (@VitalikButerin) June 20, 2020
Honestly, I think we put too much emphasis on flashy defi stuff that gives you fancy high interest rates. Much higher interest rates than you can find in traditional finance are temporary arbitrage opportunities or undisclosed risks. — vitalik.eth (@VitalikButerin) June 20, 2020
Next, Buterin praised the rise of blockchain identification methods, such as Sign In With Ethereum (SIWE), and their ability to improve user privacy. ” he [SIWE] this allows you to interact with a site without giving Google or Facebook access to your private information or the ability to take control of or block your account,” Buterin wrote. In addition, he said that these protocols could also be used to create eligibility for events such as governance or airdrops without affecting users’ personal data.
As for DAO, Buterin said that while the term “translates a lot of the hopes and dreams that people have put into the crypto space to build more democratic, resilient and effective forms of governance,” more work is needed. do more to improve resistance to censorship. and susceptibility to internal organization. Highlighting the example of MakerDAO, Buterin wrote:
“MakerDAO has $7.8 billion in collateral, more than 17 times the market capitalization of profit token, MKR. Therefore, if governance was in the hands of unprotected MKR holders, someone could buy half of the MKRs, use it to manipulate the price oracles, and steal much of the collateral for themselves. »
Finally, Ethereum’s co-founder noted that Ethereum’s blockchain technology could be merged with off-chain processes such as voting. In one script, Buterin wrote, “The votes are posted on the blockchain, so users have a means independent of the voting system to make sure their votes count. But the votes are encrypted, which preserves privacy, and a solution based on ZK-SNARK. »
As for next steps, Buterin stuck to his belief in prioritizing projects with long-term value propositions over those set on short-term profit. “Many of the most stable and boring apps are not built because there is less excitement and less short-term profit to be made around them: LUNA’s market capitalization has reached more than 30 billion dollars, and often stable coins want to be strong and simple for the most part. ignored for years,” he wrote. After the Merger, the next major expected Ethereum update is the Shanghai hard fork, which will allow users to withdraw their staked ether. This update is planned for the second half of 2023.
I suggest the term “Alfalfa leak” for something that doesn’t give you an easy path to short-term profit, but is still good for you in the end.
— vitalik.eth (@VitalikButerin) December 5, 2022
I coin the term ‘Alfalfa leak’ for something that doesn’t give you an easy path to short-term profit, but is still good for you in the end. — vitalik.eth (@VitalikButerin) December 5, 2022