Vitalik Buterin, the co-founder of Ethereum, is undoubtedly one of the most influential figures in the Ethereum ecosystem.
In a new blog post, Buterin has now revealed his hottest trends and most exciting use cases that inspire him. The post covers money, DeFi, digital identity, DAOs and hybrid applications.
Ethereum founder shares his excitement
On the subject of money, Buterin notes that this is still the first and most important application. Unlike affluent countries, where financial transactions are easy and 8% inflation is considered extreme, many high-inflation countries have no access to global currencies.
Cryptocurrencies are a solution here, although fees are an issue, Buterin admits, especially with regard to Ethereum. As such, he is excited about scaling technologies like Optimistic and ZK Rollup, but also social recovery and multisig wallets that make account abstraction more practical.
According to Buterin, stablecoins have proven themselves in payment transactions because they “realistically combine the advantages of digitization with cash-like respect for privacy”.
However, according to the Ethereum founder, centralized stablecoins are not a long-term solution to withstand surveillance.
As such, he views DAO-managed risk-weighted assets (RWA)-backed stablecoins like DAI as a “lucky medium” and governance-minimised crypto-backed stablecoins like RAI and LUSD as a riskier approach.
To do that [RAI] System stable (so not prone to crash like LUNA), each holder of RAI must match a holder of negative RAI who is depositing ETH as collateral.
DeFi and digital identity
Buterin criticizes the current DeFi sector as an “overcapitalized monster” that relies on unsustainable forms of yield farming.
According to the co-founder of Ethereum, the most important DeFi product is decentralized stablecoins. Buterin also calls prediction markets an important pillar.
My guess is that prediction markets won’t make extreme multi-billion dollar splashes, but will continue to grow steadily and become more useful over time.
Assessing the growth of digital identity, the co-founder said the trend helps protect user privacy. He pointed to Sign In With Ethereum (SIWE) as an effective identity method.
The Sign In With Ethereum (SIWE) standard allows users to sign into websites in a similar way that Google or Facebook accounts can be used today, without giving websites access to private files or the ability to take over the account or to block.
The best-known project is the Ethereum Name Service (ENS), which assigns a human-readable name to an Ethereum address. The names usually end in .eth.
DAOs and hybrid applications
On the subject of DAOs, Buterin explains that while many structures work, many others don’t, or at least aren’t aligned with the goals they’re trying to achieve.
Therefore, two key questions need to be answered: Which types of governance structures make sense and for which use cases? Does it make sense to implement these structures in the form of a DAO or through regular company formations and legal contracts?
Basically there are two possibilities: some kind of non-financialized governance and a bicameral hybrid where decisions are made not only by token holders but also by another class of users.
Buterin is also enthusiastic about hybrid applications. These are applications that not only rely on blockchain, but use both blockchain and other systems to enhance their trust models.
Use cases include voting, government registers, corporate accounting, gaming, supply chain management, and credential tracking.
At press time, ETH price is still stuck below the key resistance at $1,300.
ETH price, 4 hour chart. Source: TradingView
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