Ethereum co-founder Vitalik Buterin has said decentralized finance (DeFi) is evolving into a credible alternative to the traditional banking system.
In a closing message aired during Dromos Labs’ event on Wednesday, he remarked, “We’ll be seeing, I think, a growth in more and more cases of people, institutions, all kinds of users around the world actually using this as their primary bank account.” He added that DeFi had evolved to the point of being a credible savings option.
His comments illustrate just how far DeFi, which started as an experiment, has come — and point to the faith that decentralized systems might one day compete with established Wall Street giants.
Buterin recognised that the DeFi sector is still dealing with security risks
The DeFi space has matured beyond its earlier speculative phase, Buterin said, citing a recent blog post that called for lower-risk DeFi. He posited that DeFi may serve as a refuge for people around the world who want to move away from fiat systems and are vulnerable to political interference and financial seizure.
However, he tempered his optimism with realism, cautioning that DeFi is still working through numerous technical and security issues – most recently, the costly Balancer breach.
Nevertheless, he noted that current security in 2025 is on a completely different level compared to what the industry had back in 2019 or 2020. However, he did advocate for protocols to implement the “walkaway test,” a standard that would allow users’ funds to be retrievable at all times.
He further argued, “It’s really important for Ethereum and DeFi to really maintain and build and improve upon the core properties that have made Ethereum the Ethereum from the beginning.” In practice, that means building transparently, following common standards, promoting interoperability, and avoiding restrictive or censorable systems.
Additionally, he’s advised developers to experiment with projects that bridge Ethereum’s mainnet and Layer 2 networks, using L1 as the anchor and L2 as the scaling engine. He also stated that Ethereum is scaling on both the base layer and Layer 2s, with projects like Lighter now handling more than 10,000 transactions per second.
He pointed out that scalability is accessible to anyone today with the right engineering, and numerous valuable projects exist to promote financial freedom.
Buterin suggested combining the ZK proof to address blockchain security
Buterin has also recently admitted to a design flaw in one of Ethereum’s features, which is causing verification to slow down by 50 times, hampering the Layer-2 ecosystem worth $50 billion.
Nonetheless, he has advocated for a hybrid approach, utilizing Zero-Knowledge (ZK) proofs alongside multi-party computation, fully homomorphic encryption, and trusted execution environments to create more resilient privacy solutions.
While Ethereum is contending with internal design flaws, ZK proof has engineered its system specifically for high-speed zero-knowledge computation, backing it with $100 million in self-funded development. It has already invested $20 million in infrastructure, with $17 million in custom Proof Pod hardware.
Buterin emphasized voting as a key area where zero-knowledge proofs can help prevent coercion, while blockchain projects explore these systems to protect decision-makers.
Separately, Buterin recently weighed in on mounting criticism, defending the 43-day Ethereum unstaking delays amid growing industry criticism over trapped validator funds.
Buterin’s comments followed developer Robert Sags’ recent criticism of withdrawal delays that surpass traditional banking timescales and tarnish the user experience for retail investors.
“It’s more like a soldier deciding to quit the army. Staking is about taking on a solemn duty to defend the chain,” Buterin wrote on X, emphasizing that “friction in quitting is part of the deal.”
Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.
