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Low-Risk Defi Can Fund #Ethereum Growth, Says #Vitalik

#Ethereum co-founder #VitalikButerin believes low-risk decentralized finance protocols could provide economic stability, similar to how Google Search supports Google's broader operations. The model would fund Ethereum's ecosystem while preserving the network's cultural values and avoiding embarrassing revenue sources.

Low-risk #DeFi addresses tensions within the Ethereum community between revenue-generating applications and those aligned with the platform's founding principles. Buterin argued that payments, savings, and fully collateralized lending provide "irreplaceable value" while being "culturally congruent" with the Ethereum community.

Current high-revenue apps include NFTs, meme coins, and speculative trading, while value-aligned applications struggle with adoption or fee generation. Buterin emphasized that revenue generators don't need to be revolutionary but must avoid being "actively unethical or embarrassing" to the ecosystem.

The comparison to Google highlights how search advertising revenue funds the company's diverse projects despite accounting for over three-quarters of total revenue in 2024. Google sustains less profitable yet valuable product lines through advertising income, creating a model that Ethereum could replicate.

Buterin highlighted deposit rates on Aave as an example, where blue-chip stablecoins like $USDT and $USDC yield around 5% annually. Higher-risk stablecoins offer returns above 10%, creating sustainable revenue streams without compromising network ethics.

Ethereum DeFi total value locked recently surpassed $100 billion for the first time since early 2022. The milestone represents significant recovery from the 2022-2023 bear market when TVL collapsed across the ecosystem following multiple protocol failures.

Regulatory momentum, including the Digital Asset Market Clarity Act, could accelerate DeFi adoption further.