At the Ethereal Summit and the Ethereum Community (EthCC) 2021 conference, Ethereum creator Vitalik Buterin shared his views on NFTs (non-fungible tokens), DAOs (decentralized autonomous organizations), and DeFi’ s (decentralized finance), as well as talking about future ways of working and the constant updating of Ethereum.
DAO: Helping to work together
At the Ethereal summit, Vitalik mentioned that there are different projects and experiments around decentralized autonomous organizations (DAO), decentralized governance, proof of work, and proof of stake, which are other ideas on how people can organize and work together, using the Internet and developing projects in Ethereum; Vitalik mentioned that it would be interesting to see these ideas develop into something that helps people work together on a larger scale. It is important to note that decentralized autonomous organizations (DAO) are a set of applications and smart contracts in the Ethereum blockchain, allowing people to organize themselves through groups in a “non-hierarchical” way.
The role of NFTs and DeFi
Vitalik pointed out at the Ethereal Summit that the role of decentralized finance (DeFi) and non-fungible tokens (NFT) has been instrumental in “accelerating” the adoption of Ethereum. NFTs are unique cryptographic tokens linked to any digital content (music or images), which have recently achieved great popularity with certain brands and personalities who have launched their own NFTs. Vitalik mentions that despite the “speculative” appeal of NFTs, they also offer content creators and digital artists a transparent business model and support for their digital work.
Vitalik mentions that NFTs can be helpful in the social area, especially in charitable associations, which have also financed public services and goods. These benefits will be possible as long as the technology is not seen as a kind of “casino” that only benefits a privileged social sector. Buterin indicates that there are two ways for NFTs to be legitimate as a “funding mechanism” for social causes:
- Create a decentralized and autonomous organization, with the approval of the decentralized governance community, that authorizes certain NFTs, so that a part of their income is used for charitable causes.
- Carry out work with decentralized social networks or platforms to integrate NFT exhibitors into verified user accounts or profiles, allowing them to show their work or what they invested their money in.
Vitalik mentions that by combining these two alternatives, such projects could “push” users towards NFTs to contribute to social causes and add value to the community.
Innovating beyond Defi
At the Ethereum Community (EthCC) conference, Buterin outlined his vision for the future of Ethereum and explained that Ethereum has always gone beyond finance; for example, he mentioned the potential of decentralized social media, explaining that this is a category essential and of great interest to the community.
Buterin mentioned that one must go beyond DeFi and that by saying this, it does not mean that he is against DeFi, as he thinks that the most interesting Ethereum applications will combine financial and non-financial elements; he mentioned that the Ethereum ecosystem must expand beyond simply ‘making tokens’ or assisting with the exchange of tokens.
Heading for Ethereum 2.0
At the Ethereal summit, Vitalik mentioned that the priority is to monitor the transition to Ethereum 2.0. This long-awaited update will move the Ethereum network from a proof-of-work consensus mechanism (which tends to consume a lot of energy) to a more environmentally friendly proof-of-stake model.
Notably, the Ethereum upgrade is expected to happen in late 2021. Instead of two blockchains, with assets from one chain that has to be transferred to another new chain (as anticipated in 2018), the new network update is designed to cause the least amount of disruption to users and developers, as well as promising better scalability, security, and mining process.
What do you think about this topic? What is your opinion on NFT, DAO, and DeFi?
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