Recently, Ethereum Foundation co-founder Vitalik Buterin shared his thoughts on Ethereum’s diverse ecosystem.
In a blog post titled “What excites me about the Ethereum application ecosystem,” Vitalik wrote:
“…my excitement for Ethereum is now based not on the potential for undiscovered unknowns, but on a few specific categories of applications that are already proving themselves and only getting stronger…”
He then talked about the five application categories that interested him the most.
money
“As a side effect of the merge, transactions are being accepted much faster and the chain has become more stable, making it safer to accept transactions after fewer confirmations. Scaling technologies such as optimistic and ZK rollups are advancing rapidly. Social recovery and multisig wallets become more practical with account abstraction. It will take years for these trends to catch on as technology advances, but progress is already being made…
“I see the stablecoin design space divided into basically three distinct categories: centralized stablecoins, DAO-driven real-world asset-backed stablecoins, and governance-minimised crypto-backed stablecoins… From the user’s perspective, the three types are on a arranged tradeoff spectrum between efficiency and resilience.”
DeFi
“In my view, decentralized finance is a category that started honorably but limited, morphed into some kind of overcapitalized monster that relied on unsustainable forms of yield farming, and is now in the early stages of evolving into a stable medium and to improve security and focus on a few applications that are particularly valuable.”
identity ecosystem
“The Sign In With Ethereum (SIWE) standard allows users to log into (traditional) websites in a similar way to how you can log into websites today with Google or Facebook accounts. This is actually useful: it allows you to interact with a website without giving Google or Facebook access to your private information, or having the ability to take over your account or lock you out of your account…
“ENS lets users have usernames: I have vitalik.eth. Proof of Humanity and other proof-of-personhood systems allow users to prove they are unique human beings, which is useful in many applications, including airdrops and governance.”
DAOs
“In general, a DAO is a smart contract intended to represent an ownership or control structure over an asset or process. But this structure could be anything from simple multisig to sophisticated multi-chamber governance mechanisms like those proposed for the Optimism Collective…
“A particular subtlety is that the word “decentralized” is sometimes used to refer to both: a governance structure is decentralized when its decisions depend on decisions by a large group of participants, and an implementation of a governance structure is decentralized when it is built on top of a decentralized structure like a blockchain and is not dependent on a single national legal order.”
Hybrid Applications
“There are many applications that are not fully on-chain but use both blockchains and other systems to enhance their trust models… Voting is a prime example. High assurances of censorship resistance, auditability, and privacy are required, and systems like MACI effectively combine blockchains, ZK-SNARKs, and a limited centralized (or M-of-N) layer for scalability and coercion resistance to achieve all of these guarantees.”
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