Ethereum The crypto community has criticized Vitalik Buterin for his remarks on decentralized financial (DeFi).
Buterin expressed his doubts in an August 25th post to X about DeFi’s ability to generate significant growth for the crypto industry. Buterin stated:
“The ongoing existence of the defi market is downstream of the existence of the ETH market, which means that while defi may be great it’s fundamentally capped and can’t be _the_ thing that brings crypto to another 10-100x adoption burst.”
Backlash against the community
Buterin’s comments prompted strong responses from DeFi, including influential figures such as DeFiance Capital Thanks to the generosity of our founders, Arthur Cheong He openly challenged his beliefs.
Cheong emphasized DeFi’s role in driving Ethereum to its current value. stating:
“[Buterin] doesn’t really understand the usecase and sector that drive value to ETH and make it worth $330b.”
Similarly, Sam KazemianThe founder of Frax Finance, suggested Buterin’s lack of knowledge about the dynamics of DeFi, stablecoins and DeFi was a major problem. He claimed that the Ethereum cofounder argument relied on outdated premises.
Rhett shipp, the founder of Gravita Protocol. argued DeFi played a crucial role in ETH’s development. He said that the DeFi sector is responsible for most of Ethereum’s gas and usage fees, and also helps drive ETH value as it’s heavily used in DeFi.
Shipp also countered Buterin’s critique about unsustainable, high yields for DeFi. He noted that early subsidies were a good strategy to encourage adoption.
Shipp finished his speech by saying,
“Remove DeFi from ETH and its value would be 80% less.”
Buterin on DeFi
Buterin, despite all the criticisms and backlash has remained a fierce advocate for crypto applications that are decentralized.
He admitted that he is in favor of applications that are decentralized and sustainable.
Buterin highlighted decentralized exchanges, decentralized stablecoins like RAIYou can also use prediction markets. Polymarkets He gives examples of his support for applications.
Buterin is also called Decentralization should be expanded beyond the finance sector to other technology areas. He said centralization was a major threat. It affects encrypted messaging, social media, and identity systems.
The intersection between decentralized financial technology and other decentralized technologies is crucial to the industry’s core values including privacy, he said.
Buterin, concluded
“I think intersections between decentralized finance and other decentralized tech are going to be very important.”
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Source: cryptoslate.com