Vitalik Buterin: Ethereum’s Low-Risk DeFi Mirrors Google’s Internet Dominance in 2025

Ethereum's founder draws parallel between decentralized finance and tech giant's historic growth trajectory—suggesting DeFi's conservative approach might just reshape global finance faster than Wall Street can say 'regulated monopoly.'

The Google Blueprint

Buterin argues Ethereum's methodical DeFi expansion mimics Google's early internet strategy: build infrastructure first, capture value later. No reckless innovation—just steady, scalable protocol development that even traditional finance can't ignore.

Low-Risk, High-Impact

Forget moonshots and meme coins. Ethereum's focusing on boring, reliable financial plumbing—the kind that actually moves global capital without needing bailouts from central banks. How refreshing.

Wall Street's Ironic Dilemma

Traditional institutions now face their own disruption—watching decentralized networks achieve what their trillion-dollar infrastructures couldn't: actual financial inclusion without the usual paperwork and paternalism.

Maybe banks should've innovated instead of lobbying.

What is Low-Risk DeFi?

These protocols, he explained, create irreplaceable value for both the network and its users. Unlike speculative yield farming or meme-driven trading, they align with Ethereum’s technical properties and the community’s long-term goals.

According to him, these low-risk DeFi protocols now serve as a reliable foundation for the blockchain network. They WOULD also ensure Ethereum’s economic resilience while freeing other projects from the burden of generating revenue.

“Ethereum has decentralization baked in at a much deeper technical and social layer, and I would argue that the low-risk defi use case creates a lot of alignment between ‘doing well’ and ‘being good,’ to a degree that does not exist for advertisement,” he noted.

Buterin admitted he was initially skeptical of DeFi because its early use cases revolved around speculative tokens, liquidity mining, and unsustainable yields.

The environment, shaped partly by regulatory barriers, pushed developers toward products that appeared “safe” only when they offered little substance.

In his view, agencies like the US SEC, under Gary Gensler, created perverse incentives by punishing transparent projects while ignoring speculative activity.

“Gary Gensler and others deserve serious blame for creating a regulatory environment where the more useless your application is, the safer you are, and the more transparently you act and the more clear guarantees you offer to investors, the more likely you are to be deemed ‘a security’,” Buterin wrote

Moreover, the ethereum co-founder opined that high technical risks also shaped DeFi’s early years.

According to him, vulnerabilities in code, oracle failures, and unknown systemic weaknesses meant that only projects promising outsized returns could justify the risk.

As a result, speculation and unsustainable incentives dominated the landscape. But over time, protocol design improved, security hardened, and risks shifted toward the ecosystem’s experimental edges.

How This Could Lead to New Innovations on Ethereum

While he conceded that hacks and compromises still occur in the space, Buterin argued that the risks in traditional finance now rival or even exceed those in DeFi.

“Tail risks that cannot be ruled out continue to exist, but such tail risks exist in tradfi too – and given increasing global political instability, for many people worldwide the tail risks of tradfi are now greater than the tail risks of defi,” Buterin said.

Considering the above, Buterin argued that low-risk DeFi not only strengthens Ethereum’s economy but also enables new innovations.

He highlighted opportunities such as reputation-based undercollateralized lending and prediction markets for hedging. He also pointed to the eventual rise of “flatcoins” pegged to inflation indexes or consumer baskets rather than the US dollar.

However, he emphasized that Ethereum does not have a “magic formula” for creating yields that exceed those available in global markets.

Instead, its strength lies in providing permissionless access to existing economic opportunities, especially in places where traditional finance falls short. This accessibility, he argued, makes DeFi an honorable and practical driver of adoption.

“Low-risk defi is already supporting the Ethereum economy, it is making the world a better place even today, and it is synergistic with many of the more experimental applications that people on Ethereum are building,” he concluded.