Ethereum co-founder Vitalik Buterin believes the network’s long-term sustainability may depend on an unlikely hero: low-risk decentralized finance protocols.
In a blog post published Saturday, Buterin compared low-risk DeFi to Google Search, calling it a potential revenue anchor that could fund Ethereum’s broader ecosystem, much like ad revenue from Search props up Google’s other ventures.
The model, he argues, would allow Ethereum to maintain economic strength while preserving its cultural values through nonfinancial apps.
“The revenue generator does not have to be the most revolutionary or exciting application of Ethereum,” Buterin wrote. “But it does need to be something that is at least not actively unethical or not embarrassing.”
Buterin pointed to Aave’s stablecoin lending rates as a concrete example, blue-chip stablecoins like USDT and USDC yield around 5%, while higher-risk assets offer over 10%.
These returns, he suggests, could be a reliable base layer of income without compromising the ecosystem’s principles.
The Ethereum community, he said, has long been divided between speculative products like NFTs and memecoins, and applications that align with the network’s founding values.
The former generates high fees but little ideological satisfaction, while the latter often lacks revenue to sustain itself. Low-risk DeFi, Buterin argues, can bridge that gap.
Ethereum’s DeFi ecosystem has recently rebounded, with total value locked (TVL) crossing $100 billion for the first time since early 2022.
Though TVL lagged during the 2022-2023 bear market, recent regulatory momentum, including the Digital Asset Market Clarity Act, has revived interest.
A survey from the DeFi Education Fund found that over 40% of Americans would consider using DeFi under stronger regulatory frameworks.
Buterin also took aim at Google’s business model, noting that despite valuable open-source contributions like Chromium and Gemini AI models, the company’s reliance on advertising compromises user privacy.
In contrast, Ethereum’s decentralized design offers a path to align financial performance with ethical outcomes.
“Ethereum has the potential to do much better,” he wrote.
Beyond low-risk lending, Buterin also promoted the development of basket currencies and flatcoins, digital assets pegged to consumer price indices or multiple fiat currencies, as another way to stabilize Ethereum’s economic layer without leaning too heavily on dollar-denominated tools.
Ethereum’s on-chain revenue plummeted 44% in August to $14.1 million, down from $25.6 million in July, even as ETH surged to a new all-time high of $4,957.
Network fees also dropped 20% month-over-month, largely due to the long-term effects of the Dencun upgrade, which slashed layer-2 transaction costs but cut into Ethereum’s base-layer revenue.
The decline has raised concerns about Ethereum’s economic sustainability, with some analysts calling the August figures among the weakest since early 2021.
Critics argue that shrinking fee revenue could threaten ETH’s value proposition, while others believe Ethereum is evolving into a foundational layer for global decentralized finance, with lower costs helping fuel broader adoption.
