Vitalik Buterin, the Ethereum co-founder, dedicated an in-depth blog post to the most perspective features behind the Ethereum network.
In a blog post released on December 5, Buterin named five features of the Ethereum (ETH) network that can propagate further growth. He cited real-life use cases, blockchain identities, decentralized finance (DeFi), decentralized autonomous organizations (DAOs), and hybrid applications among the top developments he was excited about.
Buterin gave an experience of using Ether as a means of payment in a cafe in Argentina. He stated, “We ordered tea and snacks and asked if we could pay in ETH. The coffee shop owner obliged and showed me the QR code for his Binance deposit address, to which I sent about $20 of ETH from my Status wallet on my phone,” he revealed.
Giving credit to The Merge, he further stated that transactions started getting included significantly more quickly, and the chain became more stable, making it safer to accept transactions after fewer confirmations.
Buterin commented on DeFi’s rise, stating that it began honorable and limited but quickly became “an overcapitalized monster that relied on unsustainable forms of yield forming.” On an optimistic note, he added that DeFi is still in the “early stages” of setting down into a stable medium, improving security, and refocusing on valuable applications.
Further, Buterin noticed how pleased he was with the rise of blockchain identification methods, such as the Sign In With Ethereum (SIWE), and their ability to enhance user privacy. He stated how SIWE allows users to interact with a site without giving Google or Facebook access to their private information and the ability to take over their accounts. Such protocols, according to Buterin, could also be used to prove eligibility in events like governance or airdrops without compromising users’ data.
Commenting on the DAOs, Buterin discusses how it has brought democratic, resilient, and efficient forms of governance to the crypto space. He added, however, that more work needs to be done to improve censorship resistance and susceptibility within internal organizations. Highlighting the case of MakerDAO, Buterin stated that the project had $7.8bn in collateral. Thus, if governance was up to MKR holders with no safeguards, someone could buy up half the MKR, use that to manipulate the price oracles, and steal a large portion of the collateral for themselves.
Finally, Buterin commented on the possibility of adding off-chain processes, such as voting, to the Ethereum blockchain technology. He wrote: “Votes are published to the blockchain, so users have a way independent of the voting system to ensure that their votes get included. But votes are encrypted, preserving privacy, and a ZK-SNARK-based solution.”
Focus on long-term goals in the crypto space
Concluding his post, Buterin stuck to his belief of prioritizing projects with long-term value propositions rather than those fixated on hype and short-term profits.
He mentioned that many stable (and boring) applications were not built because there was less excitement and less short-term profit to be earned. Buterin cited the example of the infamous LUNA that crashed in 2022. Its market cap got over $30bn, while stablecoins striving for robustness and simplicity were ignored for years.