V God supports low-risk DeFi protocols: Don't let meme coins hijack the Ethereum ecosystem

The future development direction of Ethereum has become a hot topic of discussion. Recently, Ethereum co-founder Vitalik Buterin (V神) expressed an important viewpoint, calling on ecosystem participants not to be fooled by short-term hype around meme coins, but to focus on truly long-term valuable “low-risk DeFi protocols.” In his view, these stable applications are the real economic engine of Ethereum, capable of providing continuous funding support for innovative projects that, although modest in profit, are crucial.

Benchmarking Google’s Business Model, Revealing the True Value of DeFi

In his latest blog post, V神 cleverly compares “low-risk DeFi protocols”—such as payment systems, asset reserves, fully collateralized lending, and other mature models—to Google’s advertising business.

This analogy is profound. Google’s advertising revenue accounts for over three-quarters of its total income, and it is this powerful profit engine that enables Google to develop and maintain those profit-thin but globally meaningful product lines. V神’s point is that DeFi plays a similar role for Ethereum: as a source of ecosystem cash flow, it provides the financial foundation for exploring other experimental applications and non-financial projects.

In other words, low-risk DeFi doesn’t necessarily have to be the most revolutionary or exciting application, but it should be an entity that can be discussed openly without embarrassment.

V神 Reflects on DeFi Evolution: From Risk Hotspot to Ecosystem Pillar

Interestingly, V神 once held deep skepticism about DeFi. He admits that in its early days, the DeFi ecosystem was riddled with problems—extremely high risks, a lack of sustainable real-world applications, and the entire sector dominated by speculative trading and high-risk “yield farming.”

The launch of Otherdeed (a virtual land project launched by Yuga Labs, the creators of Bored Ape Yacht Club) in 2022 was a bloody illustration of that era. Due to poor smart contract design, bidders triggered the most insane Gas price competition in history, once setting a record for Ethereum’s single-day transaction fees. This chaos remains a cautionary tale in DeFi development history.

But the landscape has changed. Over time, DeFi risks have gradually decreased, global regulatory frameworks have become more mature, and phenomena like hacking and asset losses—once rampant—are “being gradually pushed to the periphery of the ecosystem, where more speculative-minded users mostly gather.” V神 even pointed out that, for many people worldwide, the extreme tail risks faced by traditional finance (TradFi) are now greater than those carried by DeFi.

The Embarrassment of Meme Coins vs. the Pride of Low-Risk DeFi

Although V神 did not directly name specific projects, his subsequent comments clearly imply the current state of certain ecosystems—blockchain systems “dominated by meme coin fee revenue.”

V神’s core argument is straightforward: Ethereum’s revenue engine doesn’t necessarily have to be the most aggressive or exciting applications, but it should at least be ethical and something to be proud of. If the main applications of an ecosystem are political meme coins, then it’s hard to confidently say “I am excited about this ecosystem” or “it’s changing the world.” This is not only a technical issue but also an image issue for the ecosystem.

While his words are tactful, they are pointed. V神 is clearly delineating what kinds of applications are worthy as the foundation of the ecosystem and what kind of prosperity is just an illusionary bubble.

Future Imagination of DeFi: From Non-Fully Collateralized to Parity Coins

V神’s vision does not stop at the current state. He further elaborates on potential future evolutions of low-risk DeFi, full of imagination.

These include “non-fully collateralized loans” based on personal reputation systems—loan products that do not require 100% collateral backing; integrating prediction markets deeply into existing DeFi architectures to provide more hedging tools for market participants; and even breaking dependence on the US dollar, moving toward “parity coins” and other new forms of stable value tied to inflation.

These innovative directions indicate that low-risk DeFi is not static but has ongoing potential for evolution. V神’s concluding words are meaningful: “Low-risk DeFi is already supporting Ethereum’s economy. It is now making the world better and generating synergistic effects with many experimental applications being built on Ethereum. This is a project we can all be proud of.”

Inspired by Google’s advertising model, reflecting on DeFi risk evolution, and subtly criticizing the meme coin phenomenon, V神’s series of remarks outline a clear ecosystem vision: Ethereum should be supported by stable, sustainable DeFi applications as its economic foundation, rather than being dominated by short-term hype and speculative frenzy. This undoubtedly provides enlightenment for the development direction of the entire crypto ecosystem.