Ethereum has long wrestled with the “non-ouroboros” problem: how to generate real revenue beyond speculative loops of buying, selling, and leveraging tokens on its chain.
For years, memecoins, non-fungible tokens, and incentive-driven decentralised finance apps have propped up activity but failed to provide a sustainable foundation for Ethereum’s nearly $100 billion DeFi economy according to DefiLlama data.
Now, as Wall Street is increasingly betting on Ethereum as the backbone of the stablecoin boom, co-founder Vitalik Buterin argues that “low-risk DeFi,” which includes things like payments, savings, and collateralised lending, could finally give the network its flagship revenue engine.
“Non-financial and more experimental applications, are crucially important for Ethereum’s role in the world and for its culture,” Buterin wrote in a blog post published Sunday. “But they do not need to be looked to as revenue generators.”
That’s a major shift from Ethereum’s earlier years, when DeFi was synonymous with double-digit yields on risky liquidity farms and frenzies over cartoon NFTs.
Buterin admits he was “more suspicious of DeFi” then, describing its main appeal as “making money from trading highly speculative tokens.”
Today, he says, the centre of gravity has moved toward simpler financial products.
The raw numbers and other analysts agree.
The supply of stablecoins on Ethereum has ballooned 700% since the start of 2021 to more than $160 billion, while real-world assets like tokenised US Treasuries have grown from almost nothing into a $9 billion market.
“Stablecoins are the ‘ChatGPT’ of crypto,” Tom Lee, chair of Ethereum treasury firm BitMine, told DL News in August. “And Ethereum is the backbone. It’s legally recognised, and has zero downtime.”
