Vitalik: Low-risk DeFi is the Ethereum search engine, meme coins cannot change the world.

Ethereum co-founder Vitalik Buterin called for the Ethereum community to pay more attention to low-risk Decentralized Finance protocols in a new blog post released on Sunday, arguing that such protocols can economically sustain low-profit but still important applications on the network, much like the core value brought to Google by search engines. This viewpoint directly addresses the current phenomenon in the crypto market of excessive focus on short-term speculation and meme coins.

Low-Risk DeFi: The Economic Pillar of Ethereum

In the post, Buterin compared low-risk Decentralized Finance (i.e., payment, savings, over-collateralized loans, and other well-known applications) to Google's advertising business, which accounted for more than three-quarters of the company's revenue in 2024. Buterin believes that Google can maintain a product line with lower profits but "interesting and valuable to the world" because of its advertising revenue.

"Low-risk DeFi can play a similar role for Ethereum," Buterin wrote. "Other applications (including non-financial and more experimental applications) are crucial to Ethereum's position in the world and its culture, but they do not have to be seen as sources of income."

This viewpoint marks Buterin's shift in attitude towards Decentralized Finance (DeFi). He has previously expressed skepticism towards DeFi, believing that the early risks were too high, making it difficult to achieve sustainable use cases, and that speculative asset trading or high-risk yield farming occupied too much attention in the industry.

DeFi risk reduction, value enhancement

As risks decrease and global regulatory agencies continue to evolve, "hacker attacks and losses are increasingly being pushed to the periphery of the ecosystem, where users are more experimental and speculative," Buterin wrote. Although tail risks are still worth noting, Vitalik believes that "for many people globally, the tail risks of traditional finance now outweigh the tail risks of Decentralized Finance."

Buterin pointed out that Yuga Labs' Otherdeed sale in 2022 was one of the highest single-day Ethereum transaction fee days, as prior to that, a Gas war erupted among bidders due to poor smart contract optimization. Such events highlight the challenges of blockchain infrastructure under high demand and illustrate why there is a need for more focus on sustainable low-risk applications.

Subtle Criticism of Meme Coin Dominance

Although Buterin's blog post subtly compared Ethereum to an ecosystem dominated by memecoins in terms of fee revenue, he did not mention any other blockchain names. However, his position is very clear:

"The source of income may not necessarily be the most revolutionary or exciting application of Ethereum. But it at least needs to be something that is not unethical or embarrassing," Buterin wrote (emphasis in the original text). "If its largest single application is a political memecoin, then you cannot seriously say that you are excited about this ecosystem, because it is actively changing the world."

This passage is widely interpreted as a criticism of the large amount of network resources occupied by memecoin trading on certain blockchains, and it also serves as a warning to the Ethereum community, reminding them to follow the development of truly valuable applications.

Future Development Directions of Low-Risk DeFi

Buterin believes that low-risk DeFi can eventually evolve into other future applications, such as:

· Reputation-based low collateral lending

· Combine the prediction market with the existing Decentralized Finance structure.

· Transitioning from using the dollar to other stable forms of value, such as "flat coins"

"Low-risk DeFi has been supporting the Ethereum economy, making the world a better place even today, and it has synergies with many experimental applications being built on Ethereum. This is a project that we all can be proud of," Buterin concluded.

Strategic Adjustment of the Ethereum Foundation

Buterin's blog post was published after the Ethereum Foundation made significant adjustments earlier this year. The organization is currently co-managed by co-executive directors Hsiao-Wei Wang and Tomasz K. Stańczak, and this year it launched the "Trillion Dollar Security" plan, outlining an end-to-end privacy roadmap and completely overhauling its funding program to reduce destruction.

These changes align with Buterin's perspective, indicating that the Ethereum ecosystem is evolving towards a more mature, sustainable, and substantively valuable direction, rather than merely chasing short-term speculative trends.