Vitalik Buterin: The Ethereum community cannot be limited to DeFi; non-financial applications are equally important

The author of this article is SAMUEL HAIG, translated by Overnight Porridge.

On July 22, at the EthCC conference held in Paris, Ethereum co-founder Vitalik Buterin mentioned in his keynote speech that financial applications (DeFi) currently dominate the Ethereum community, but in his view, non-financial utilities are the most interesting part of the universal blockchain vision.

Vitalik stated:

"Being defined by DeFi is better than being undefined, but it needs to go further."

He then mentioned several non-financial applications of Ethereum, including decentralized social media, identity verification & authentication, and traceable public goods financing.

"Going beyond DeFi is not against DeFi; in fact, I think the most interesting Ethereum applications will combine financial and non-financial elements."

He also added:

"Maybe in a few years, we will have a lot of truly exciting things […] that are not just within the Ethereum ecosystem, but also outside of it, and they will provide real value to a variety of people."

It is reported that Vitalik has begun exploring public goods financing, and recently in a co-authored blog post with the Optimism team, the scaling team Optimism promised to fund open-source development through a traceable reward protocol.

Why DeFi First?

Vitalik attributed the Ethereum community's focus on DeFi to two main factors.

First, he believes that finance is the area that needs improvement the most. He said:

"I can send you a centralized email, and you will receive it in one second. Of course, maybe various intelligence agencies can read that email, but at least you can read it after one second, while international bank wire transfers do not work that way."

Vitalik also emphasized that there is a widespread issue of high fees in the push towards financial applications in the industry, pointing out:

"Deeply involved DeFi participants (including degens, apes, orangutans) can bear these costs, but if we start discussing a decentralized social media where every tweet becomes an NFT, then paying a $5.22 fee per transaction just won't work."

He then added that the challenge of high fees is being addressed by the growing Ethereum layer 2 ecosystem.

With the reduction of transaction costs on the Ethereum network, Vitalik asserted that it is now time to explore how to use Ethereum to solve other problems, saying:

"The Ethereum ecosystem must expand, not just to create tokens that help trade other tokens."

Although he acknowledged that financial derivatives provide some value to the industry, he warned of the systemic risks associated with complex derivatives, concluding:

"We cannot focus solely on DeFi; these things are valuable at both layer one and layer two, […] but once you reach layer six, you actually increase the risk of financial instability and the collapse of the entire system."

Source link: www.8btc.com