- Vitalik Buterin believes low-risk DeFi could transform Ethereum just like search transformed Google, making blockchain safer and more useful.
- Ethereum DeFi losses fell from 5.5% of TVL in 2019 to under 1% by 2025, showing real progress in security and user protection worldwide.
- Low-risk DeFi is opening doors to fairer lending, prediction markets, and new stable assets, driving the future of inclusive digital finance.
Ethereum co-founder Vitalik Buterin has drawn sharp attention to a shifting trend in decentralized finance (DeFi). He stated, “Low-risk defi can be for Ethereum what search was for Google.” This bold comparison reflects the growing maturity of the ecosystem. For years, DeFi carried massive risks that pushed users toward traditional finance. However, conditions have changed, and the stakes are now different.
In 2019, Ethereum’s DeFi protocols suffered major setbacks, with losses reaching about 5.5% of the total value locked (TVL). This highlighted early fragility, with smart contracts and security practices still underdeveloped.
However, continuous improvements since then have reshaped the picture. By 2021, protocols had slashed losses to a fraction of earlier levels. There was a slight rebound in 2022 and 2023. Yet, by 2024 and 2025, losses dropped below 1% of TVL, a near negligible figure.
Security and Stability Define the New Era
Consequently, Buterin argues that DeFi today can, in many cases, be safer than traditional finance for global users. He emphasized that regulatory clarity and stronger smart contract safeguards have reduced risks significantly. Moreover, as risk declines, opportunities for innovation widen. Low-risk DeFi offers a foundation for scaling more practical and trusted applications.
Additionally, Buterin stressed that DeFi’s future lies in expanding beyond collateral-heavy systems. Reputation-based lending could give borrowers access to credit based on their trustworthiness, not just their holdings. Hence, DeFi could empower people excluded from conventional finance.
Besides lending, prediction markets represent another frontier. These tools allow investors to hedge against global risks with precision. Consequently, such systems could blend financial protection with efficient portfolio strategies.
Moreover, Buterin envisions stable value extending beyond the U.S. dollar. Alternatives include baskets of currencies, inflation-linked flatcoins, or personal tokens tied to communities. Projects like Circles and experimental flatcoins already push this shift forward.
Ethereum’s DeFi highlights a structural change that could position blockchain finance as a mainstream alternative. Low-risk DeFi is the groundwork for future financial inclusion and innovation.
