- Buterin called DeFi core to Ethereum but limited support to open, permissionless, privacy-preserving protocols.
- He urged developers to move beyond speculation and pass a “walkaway test” for true decentralization.
- MakerDAO leadership echoed support for resilient, Ethereum-native financial systems.
Ethereum co-founder Vitalik Buterin detailed how the Ethereum Foundation will approach decentralized finance going forward. In a recent post, Buterin explained the Foundation’s position on DeFi development. He said DeFi remains central to Ethereum’s value, however support will focus only on systems meeting strict decentralization, privacy, and security standards.
DeFi Framed as Core to Financial Agency
According to Buterin, DeFi enables permissionless access to savings, risk management, and wealth-building tools worldwide. He said financial empowerment directly supports personal agency and freedom. While Ethereum supports many use cases, he stressed finance remains an important pillar.
However, the Foundation will not back DeFi activity indiscriminately. Instead, it seeks permissionless, open-source, privacy-preserving systems that reduce reliance on centralized intermediaries.
Buterin said protocols should maximize user control while minimizing trusted third parties. He added that Ethereum’s permissionless nature allows poor designs, yet the Foundation will only engage with aligned teams.
Innovation Beyond Incremental Products
Buterin also challenged developers to move past incremental improvements. He referenced the early DeFi era, noting innovations like automated market makers reshaped finance. He urged teams to address deeper problems, including risk management and future expense hedging.
Notably, he warned against projects that embed unnecessary centralized trust for convenience. He also criticized designs focused on short-term speculation. Instead, the Foundation wants systems that can operate independently. Buterin introduced the “walkaway test,” describing protocols that function even if original teams disappear or become compromised.
Security, Privacy, and Open Infrastructure
Buterin outlined several technical priorities for DeFi development. These include traditional audits, formal verification tools, wallet safeguards, and AI-assisted security methods. He also highlighted oracle decentralization risks and called for focused ecosystem scrutiny.
Privacy remains another focus, including private payments and complex financial positions. Open-source licensing and forkability also matter, according to Buterin. Separately, Charles, CEO of MakerDAO, echoed these views. He said the Foundation supports “Defipunk,” meaning financial systems that could not exist without Ethereum.
