V god: DeFi should not be the entire future of Ethereum

Vitalik Buterin: Ethereum Community Can't be limited to DeFi, Non-financial Applications are equally important

The night's porridge, Babbitt

Vitalik said.

"Better defined by DeFi than not defined at all, but it needs to go further."

Vitalik then mentioned several non-financial applications of Ethereum, including decentralized social media, authentication and certification, and traceable public goods funding.

"Beyond DeFi is not against DeFi, in fact, I think the most interesting Ethereum apps will combine financial and non-financial elements."

He added:

"Maybe in a few years, we'll have a lot of really exciting things [...] that are not just inside the Ethereum ecosystem, but outside the Ethereum ecosystem, that will provide real value to all kinds of people."

Vitalik is already exploring public good financing, in a recent report he co-authored with the Team in OptimismpostThe scale team promises to fund open source development through a traceable incentive agreement.

Why DeFi first?

Vitalik attributes the ethereum community's focus on DeFi to two main factors.

First, he thinks finance is the area that needs improvement the most, he says:

"I could send you a centralized email and you would get it in a second. Sure, maybe the various intelligence agencies would read it, but at least you would read it in a second, and that's not how international bank wire transfers work."

Vitalik also highlighted the prevalence of overcharging in the drive to move the industry toward financial applications, noting:

"DeFi deep players (including Degens, Apes, orangutans) can all afford this, but if we start talking about a decentralized social media where every tweet becomes an NFT, then paying $5.22 per transaction doesn't work."

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

With the cost of transactions on the Ethereum network falling, Vitalik asserts that now is the time to explore how Ethereum can be used to solve other problems, saying:

"The Ethereum ecosystem has to expand beyond just making tokens that help other tokens trade."

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

"We can't just focus on DeFi, these things are valuable at tier 1 and tier 2, [...] but once you get to tier 6, you actually increase the risk of financial instability and the whole system collapsing."    

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