Vitalik Buterin Addresses Claims of Disregarding DeFi

Ethereum co-founder Vitalik Buterin has responded to accusations that he opposes the development of DeFi within the blockchain ecosystem.

The discussion about his stance on decentralized finance applications gained traction in the community following the release of the Steady Lads podcast episode featuring Kain Warwick on August 23.

The hosts initiated the conversation with the founder of Infinex and Synthetix, referencing his post on X from August 7. In the tweet, Warwick criticized the Ethereum Foundation’s (EF) policy. According to him, the organization “begrudgingly tolerates DeFi” and is an opponent of the sector.

If the only thing propping up your chain for the last five years is DeFi, and the best you can muster is begrudgingly tolerating it, you are anti-DeFi. I’m sorry but the default position should be absolutely falling over yourself to support and encourage it…

— kain (@kaiynne) August 7, 2024

“[…] I’m sorry but the default position should be absolutely falling over yourself to support and encourage it…,” Warwick concluded.

He stated that the tweet was the result of “years of frustration” with Buterin’s approach, whom the entrepreneur described as “an incredible person who has achieved grand things.”

“One of the most important things he got wrong over the last five years was the importance of DeFi,” Warwick declared.

He believes that Vitalik’s attitude towards the segment is equivalent to the stance of “stop doing this,” which causes frustration in the community. Meanwhile, DeFi is the primary use case for blockchain.

In the comments under Warwick’s tweet, many agreed with his viewpoint. Polygon Labs’ Chief Information Security Officer Mudit Gupta stated that EF treats developers of all applications dismissively, not just DeFi.

Well, forget DeFi. All of app devs have been treated as third class citizens mostly. Just look at the state of any EIP meant to improve app dev’s life. None of them get any love.

The disconnect between the core devs/foundation and the app devs has always been an issue.

— Mudit Gupta (@Mudit__Gupta) August 7, 2024

A user named Clouted wrote that ironically, “Ethereum is only valuable because of DeFi,” and decentralized finance applications “cannot exist in a meaningful capacity” outside the blockchain.

i agree with everything that @kaiynne said

as far as im concerned, ethereum is only valuable because of defi

and ironically defi is only valuable on ethereum

no.. i dont think defi can exist in a meaningful capacity anywhere other than ethereum due to severe level of…

— Clouted (@CloutedMind) August 7, 2024

“They need to support each other more and more,” he noted.

Following the podcast’s release, the community became interested in Buterin’s personal stance on the matter. Synthetix advisor MilliΞ stated that he does not believe in Buterin’s hostile attitude towards DeFi. He suggested that the Ethereum founder is a “purist,” encouraging decentralized finance applications without external dependencies.

However, MilliΞ acknowledged that Buterin promoting “something like USDC” while demanding “less DeFi” appears ironic.

The kinds of applications that I want to see are applications that are (i) useful in a sustainable way, and (ii) don’t sacrifice on the principles (permissionlessness, decentralization, etc)

I think DEXes are great, and I use them every week.

I think decentralized stablecoins…

— vitalik.eth (@VitalikButerin) August 25, 2024

The programmer responded to the post. He emphasized his desire to see useful and sustainable applications that adhere to core principles—permissionlessness and decentralization. According to Buterin, DEX, decentralized stablecoins (such as RAI), or the Polymarket platform are “great.”

“I think USDC is not as good as RAI, but practically speaking, we just have to respect that it is incredibly convenient and used by many people. It is incredibly useful for me personally for international donations, much more convenient than banking,” he added.

Buterin believes that the growth in the number of users of Circle’s “stablecoin” will ultimately encourage them to transition to more decentralized stablecoins.

“What I don’t respect are things whose appeal comes from some temporary source that lacks sustainability. For example, I had no enthusiasm for the liquidity farming hype in 2021 because it was obvious that it came from token issuance, which is finite,” Buterin stated.

In June, Wintermute CEO Evgeny Gaevoy criticized the Ethereum co-founder for his attempts to “build socialism.”