The developer and co-founder of Ethereum recently urged the community to innovate beyond decentralized finance. He made these statements during a conference that took place in Paris.
According to Buterin, non-financial utilities are part of the vision general-purpose blockchains such as Ethereum aims to offer. But he is somewhat disappointed that the ETH blockchain is now seeing more financial application only.
Buterin stated that it is better to know Ethereum by decentralized finance instead of for nothing. But, the blockchain has to be known for more.
The lead developer mentioned that other applications outside the financial sector can still be developed on the ecosystem to support this.
For instance, developers can also build applications such as retroactive public goods funding, identity verification & attestation, and decentralized social media on Ethereum.
Buterin also stated clearly that innovating beyond decentralized finance doesn’t mean being against it. He even mentioned that Ethereum applications that combine both finance & non-finance elements would really be interesting.
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He believes that exciting things might offer different values for people on the network and beyond it in a few years to come.
Currently, the ETH co-founder is working on “public goods funding.” From a blog post that Buterin co-authored, there was information that Optimism has promised to fund open-source development via retroactive rewards protocols.
Why Is The Ethereum Community Headed Towards DeFi?
According to Buterin, two factors are responsible for the preoccupation with decentralized finance. The first one is that centralized technology hasn’t been handling finance very well. Unfortunately, finance is essential and offers a wider domain decentralization.
Secondly, he mentioned that high fees are contributing to the growing interest in dApps. But he mentioned that the high fee issues on Ethereum are gradually fizzling out due to the growing lay-two networks.
Since the team is already working on lower transaction fees, the Ethereum CEO believes that the tie has come for the community to explore other opportunities. This is why he stated that Ethereum should innovate towards other possibilities, not just in creating tokens.
Buterin believes that if the community focuses on DeFi only, such actions will push the blockchain to infinity. But, on the other hand, if nothing changes, the community will only get tokens that profit through yield farming.
He also noted that financial derivatives bring good value to the crypto sector. However, he warned that derivatives are too risky.