Vitalik Buterin, the co-founder of Ethereum is undoubtedly one of the most influential figures in the Ethereum ecosystem.
In a new blog Publish, Buterin has now revealed his hottest trends and the most exciting use cases that excite 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 always the first and most important application. Unlike rich countries where financial transactions are easy and 8% inflation is considered extreme, for many countries with high inflation, access to global currencies is prohibited.
Cryptocurrencies are a solution here, although fees are a concern, as Buterin admits, especially when it comes to Ethereum. Therefore, he is excited about scaling technologies such as Optimistic and Cumulative ZKbut also social recovery and multisig wallets, through which account abstraction becomes more convenient.
In payments, Buterin says stablecoins have a proven track record, “realistically combining the benefits of digitization with cash-like privacy.”
However, centralized stablecoins are not a long-term solution to withstand surveillance, according to the Ethereum founder.
Therefore, he views DAO-managed risk-weighted asset (RWA)-backed stablecoins, such as DAI, as a “middle ground,” and governance-minimized crypto stablecoins, such as RAI and LUSD, as a riskier approach.
To do the [RAI] stable system (so don’t be vulnerable to collapse like LUNA), each RAI holder must be matched with a negative RAI holder who puts in 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.
The most important DeFi product, according to the Ethereum co-founder, are decentralized stablecoins. Buterin also calls prediction markets an important pillar.
I expect prediction markets not to make extreme multi-billion dollar splashes, but to continue to grow steadily and become more useful over time.
In his assessment of the growth of digital identity, the co-founder said the trend helps protect user privacy. He highlighted Sign In With Ethereum (SIWE) as an effective identity method.
The Sign In With Ethereum (SIWE) standard allows users to sign in to websites the same way Google or Facebook accounts can be used today, without giving the sites access to private files or the ability to support or block the account.
The best known project is the Ethereum Name Service (ENS), which assigns a human-readable name to an Ethereum address. Names usually end in .eth.
CAD and hybrid applications
On DAOs, Buterin explains that while there are many structures that work, many others do not work, or at least are not aligned with the goals they are trying to achieve.
Therefore, two key questions need to be answered: what types of governance structures are useful and for what use cases? Does it make sense to implement these structures in the form of a DAO, or through regular incorporation and legal contracts?
Basically, there are two options: an unfunded type of 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 do not rely solely on blockchain, but use both blockchains and other systems to enhance their trust models.
Use cases include voting, government records, business accounting, gaming, supply chain management, and credential tracking.
As of press time, ETH price is still stuck below key resistance at $1,300.