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- Several nonfinancial uses of Ethereum
- Ethereum applications are going to combine elements of finance and non-finance
- High transaction fee solved through Ethereum’s growing ecosystem
Ethereum co-founder and lead developer Vitalik Buterin has urged the community to grow beyond the limits of DeFi and innovate new ideas. The second layer scaling matures for Ethereum Buterin implored the community to innovate beyond just DApps for DeFi degens.
In his keynote address at the EthCC conference in Paris, Ethereum co-founder and lead developer Vitalik Buterin asked developers to think beyond the realms of decentralized finance. Buterin addressed nonfinancial services as the essential part of the vision of general-purpose blockchains. Buterin lamented the fact that financial applications presently govern the Ethereum space. However, he added that being defined by decentralized finance is better than not being defined at all. However, things must move, and the community must also look beyond and innovate to include other sectors.
Buterin named several nonfinancial uses of Ethereum, including decentralized social media, identity verification and attestation, and retroactive public goods funding. Buterin added that he has nothing against DeFi but was talking about moving beyond DeFi into other applications of Ethereum. Ethereum applications are going to combine elements of finance and non-finance
Buterin added that in a few years, we would see many novel and exciting things than just offering diverse and real value to all kinds of people, not just within the Ethereum ecosystem, but also going far beyond it as well.
‘Layer-Two Scaling Solution, Optimism’
Buterin has already started work on public goods funding. In a blog post on July 21 titled ‘Layer-Two Scaling Solution, Optimism,’ Buterin promised to fund open source development through a retroactive rewards protocol. Optimism committed all profits generated through sequencing to the initiative.
Beyond DeFi
Finance is one area where centralized technology finds wide use. Finance offers a more extensive domain for decentralization in comparison to other industries. Buterin also gave a practical example about how a centralized email is delivered in a second, and anyone can read it. Anyone can include intelligence agencies also, but the mail is delivered instantly. International bank wires do not work that way.
A high transaction fee is now solved through Ethereum’s growing ecosystem
The prevalence of high prices is also pushing the sector towards financial applications. However, Buterin contended that the high transaction fee is now solved through Ethereum’s growing ecosystem of layer-two networks.
Work on ways to offset transaction costs on Ethereum is currently being undertaken, and it is time to investigate how to use Ethereum to tackle other issues. The Ethereum platform will have to metamorphose into something more than just creating tokens and facilitating trading with tokens.
Buterin said that confining just DeFi will end up getting tokens that give you returns from yield farming other currencies that are financial derivatives between other yield farming tokens. In the end, you are left only with tokens that give you profits. Financial derivatives offer some value to the sector, but the risk associated with complex derivative products is always there. So diversify beyond DeFi.
Buterin added that this thing is valuable till it is layer one, layer two. If you continue up to layer six, the whole structure is unstable, and the risk of collapse is very high.