Vitalik: Ethereum’s Google Search May Be Low-Risk DeFi
Vitalik Buterin, a co-founder of Ethereum, thinks low-risk decentralized banking protocols could be the network’s unsung hero.
Buterin likened low-risk DeFi to Google Search in a blog post on Saturday, describing it as a possible revenue source that might finance Ethereum’s larger ecosystem in a similar way to how Google’s other endeavors are supported by ad revenue from Search.
Vitalik: Ethereum Can Balance Profit and Principles
He contends that by using non-financial apps, the concept will enable Ethereum to preserve its cultural values while retaining its economic power.
Buterin noted, “The revenue generator does not have to be the most innovative or fascinating use of Ethereum.” However, it must be something that is at least not blatantly immoral or embarrassing.
As a specific example, Buterin cited Aave’s stablecoin loan rates, which show that higher-risk assets yield over 10% while blue-chip stablecoins like USDT and USDC yield about 5%.
He contends that these returns might serve as a stable foundation of revenue without undermining the values of the ecosystem.
He claimed that the Ethereum community has historically been split between applications that adhere to the network’s core principles and speculative goods like NFTs and memecoins.
While the latter frequently lacks the funds to remain viable, the former earns huge fees but little ideological pleasure. Buterin contends that low-risk DeFi can close that disparity.
With total value locked (TVL) surpassing $100 billion for the first time since early 2022, Ethereum’s DeFi ecosystem has just recovered.
Even though TVL underperformed during the bad market of 2022–2023, demand has recently increased due to new legislative initiatives including the Digital Asset Market Clarity Act.
According to a DeFi Education Fund survey, more than 40% of Americans said they would use DeFi if there were stricter regulations.
Buterin also criticized Google’s economic strategy, pointing out that the company’s reliance on advertising jeopardizes user privacy even in the face of significant open-source contributions like Chromium and Gemini AI models.
Ethereum’s decentralized architecture, on the other hand, provides a way to match ethical results with financial performance.
He wrote, “Ethereum has the potential to do much better.”As an additional strategy to stabilize Ethereum’s economy, Buterin encouraged the creation of basket currencies and flatcoins—digital assets linked to consumer price indexes or multiple fiat currencies—in addition to low-risk loans.
Ethereum Revenue Falls 44% in August Despite Price Surge
Despite Ethereum’s ascent to a new all-time high of $4,957, its on-chain income fell 44% in August to $14.1 million from $25.6 million in July.
Due in large part to the long-term consequences of the Dencun upgrade, which reduced layer-2 transaction costs but reduced Ethereum’s base-layer revenue, network fees also decreased 20% month over month.
Concerns over Ethereum’s economic viability have been raised by the drop; according to some observers, the August numbers are among the lowest since early 2021.
While some contend that Ethereum’s value proposition may be threatened by declining fee income, others think the cryptocurrency is developing into a fundamental component of global decentralized finance, with reduced costs encouraging wider usage.
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