Vitalik's Latest Interview: The Path of Ethereum's World Ledger and Development Ideas in the AI Era

Compilation: Deep Tide TechFlow

Guest: Vitalik Buterin, Co-founder of Ethereum

Hosts: Ryan Sean Adams; David Hoffman

Podcast Source: Bankless

Original Title: Vitalik Buterin: How Ethereum Becomes The World Ledger

Release Date: August 11, 2025

Key Takeaways

Ethereum has celebrated its tenth birthday, and founder Vitalik Buterin reflected on the development of Ethereum over the past decade and looked ahead to its future in this conversation. He shared unexpected surprises and challenges during Ethereum's growth, such as the events of The DAO and NFTs, and suggested some different choices he might have made if he could start over.

In this exchange, we delved into the evolution of Ethereum's culture, the importance of privacy as a core value, and the trade-offs between L1 and L2. Additionally, Vitalik shared his vision for how Ethereum could develop in an AI-dominated future.

Highlights

• One of Ethereum's greatest contributions is its significant role in promoting openness and decentralization, gradually making these ideas a habitual way of thinking for many. These values need to be passed down and updated by each generation.

• If I had the chance to go back in time, I would tell young Vitalik all our current understanding of zero-knowledge proof (ZK-SNARKs) technology.

• Ethereum should be an inclusive and diverse ecosystem that can accommodate many different people and viewpoints.

• The concept of Ethereum as a "world ledger" is more concrete and better conveys Ethereum's core values.

• The emergence of NFTs was also a huge surprise. I had no expectation of the birth of NFTs.

• If we compare the ledger (Ethereum) to a book, then ETH is like the "ink" used to write the ledger. The ink can represent the functions of L2. If the ink is marked with TM (trademark symbol), it means it is a branded L2; if there is no TM symbol, it is an unbranded L2.

• Every project has the responsibility to create the best version of the philosophy that its members are most passionate about and comfortable with. The hope is that the end result is that we can create things that benefit the world, rather than letting projects fall into conflict or devolve into a state of merely shouting slogans.

• Privacy is a key focus we must pay attention to; privacy is freedom and an important right that we should all protect. Everyone in the Ethereum ecosystem should support the concept of privacy.

• We should not have "privacy wallets"; privacy should be a feature of all wallets, and privacy features should be able to seamlessly integrate into existing wallets.

• The proliferation of a centralized data collection system is fragile because if these databases are hacked, the data that was thought to help national security could actually lead to instability in national security.

• Ethereum's role can be divided into two parts. First, it provides a tool that protects people's freedom, autonomy, and organizational capacity, which does not rely on any individual, company, or country; the second part is building a global community. Ethereum attracts a group of people who care about decentralized finance, innovative organizational forms, privacy protection, and democratic governance, and the Ethereum community itself still has irreplaceable value.

• The difficulties in 2024 are partly due to the decline in ETH prices putting pressure on the ecosystem; on the other hand, many once-popular projects and topics are gradually coming to an end, while new alternative projects have yet to successfully take over. The future direction must be new projects that can bring real benefits to the community and gain widespread support.

• L1 should have moderately low latency to meet the needs of ordinary users; for scenarios that require extremely low latency, such as high-frequency trading, L2 is a better choice. We need to find a way for L1 and L2 to work together to achieve balanced development of the entire ecosystem.

• The greatest value of Ethereum lies in its openness. It is like a sandbox that allows people to experiment and innovate in different directions.

• "I believe that participants in the Ethereum ecosystem, including those engaged in financial activities, are responsible and will not take risks lightly. ETH derivatives are a fundamental way to achieve financial stability, so I support the existence of these treasury companies."

• Blockchain technology can promote a fairer and more transparent world.

The First Two Years of Ethereum

David:

Ethereum has just celebrated its tenth anniversary, so first, happy birthday to Ethereum! The Ethereum white paper was first published in 2013, and the mainnet officially launched in July 2015.

Ten years have passed, Vitalik, how do you feel about Ethereum's development compared to the initial vision?

Vitalik:

It can be said that Ethereum's development has far exceeded my expectations, which is the most important point. But at the same time, the process has also taken much longer than I anticipated.

When I wrote the white paper, I originally planned to treat it as a side project, completing it in a few months and then returning to university to continue my studies. Of course, that did not happen. Later, we envisioned that Ethereum would go through four phases, ultimately completing the transition to Proof of Stake. At that time, we thought the foundation's funds would run out, and the project would naturally enter a state of self-development, but that was not the case.

In addition, the rise of decentralized finance (DeFi) and the launch of various tokens were application scenarios I mentioned in the white paper. Although the terminology people ultimately used differed from my original expressions, these phenomena did arrive as expected, such as the birth of Ethereum Name Service (ENS) and stablecoins. At the same time, there were many unexpected discoveries.

Ethereum's Major Contributions

David:

Ethereum has gone through a decade of history. Looking back, we find that many things have basically been realized according to the original plan. If you have read the Ethereum white paper and then look at today's Ethereum, you will find that it has indeed realized many of the initial visions. Reflecting on this history, what unique contributions do you think Ethereum has brought to the world? Which ones are you most proud of or satisfied with?

Vitalik:

I believe one of Ethereum's greatest contributions is its significant role in promoting openness and decentralization, gradually making these ideas a habitual way of thinking for many. These values need to be passed down and updated by each generation. Just like the rise of free and open-source software in the 1980s and 1990s, the blockchain world has largely inherited and continued these spirits into the 2010s and 2020s. Ethereum has indeed achieved remarkable results in this regard, turning many ideas that were originally theoretical into reality.

For example, prediction markets are a typical case. In the early 2010s, prediction markets were still just a theoretical concept, mainly used as a market mechanism for analyzing event outcomes. Ethereum provided an important experimental platform that brought this idea from concept to reality.

Another example is the DAO (Decentralized Autonomous Organization). Although this field has gone through many twists and turns, Ethereum has made governance structures based on blockchain technology more flexible and operable. I am very proud of this, and I believe we will continue to see results in these areas in the coming decades. Ethereum's contributions are not limited to a single field but have broadly influenced many different aspects, having a profound impact from technology to social concepts.

The Biggest Surprises

Ryan:

You mentioned some surprises along the way. I think many unexpected things must have happened during this journey. Interestingly, you originally expected Ethereum to be just a side project, but now it has developed into a large-scale full-time endeavor that has lasted for more than a decade.

So, what major events during Ethereum's development surprised you?

Vitalik:

First, the DAO (Decentralized Autonomous Organization) received such enormous support from Ethereum and then almost immediately collapsed. Looking back, the fact that the DAO received such massive funding surprised me more than its collapse, but both events were impressive.

Ryan:

It's like an out-of-control use case and can also be seen as an early instance of decentralized finance (DeFi), as it was closely related to the formation of capital. I remember that at the time, about 5% of the Ethereum supply was attracted into the DAO, which is a huge number.

Vitalik:

It actually reached 11%. At that time, the total supply of Ethereum was 11 million. If it were a lighter version, it might have reached 17%. But in any case, that ratio was indeed very high, marking the first time in Ethereum's history.

Another surprise was the birth of Ethereum Classic (ETC). The controversy surrounding the hard fork was almost a "war." I feel that this part of history is almost as dramatic as a TV series. Just after the ETC controversy ended, the DDoS attack incident in Shanghai followed, as if it were meticulously arranged by a screenwriter. These events brought many technical challenges and were very interesting.

The emergence of NFTs was also a huge surprise. I had no expectation of the birth of NFTs. The development of decentralized finance (DeFi) also surprised me. In 2019, the scale of DeFi was still very small, with only Uniswap barely existing. But just a year and a half later, DeFi experienced explosive growth. Additionally, the implementation of Proof of Stake (PoS) took much longer than I expected, which is also a point worth reflecting on.

Of course, there were also some positive surprises, such as the speed of development of zero-knowledge proof (zk) technology being five times faster than I expected, which is very gratifying. Moreover, the level of interest from institutions and governments in blockchain technology has exceeded my expectations. Even in the 2010s, many large companies and governments had already shown strong interest in this field. Although the interest at that time was more about showcasing innovation capabilities, it was still something I did not anticipate. Now, institutional interest has returned, but this time in a more concrete and practical form, along with many other things that have surprised me.

Things That Took Longer Than Expected

Ryan:

Vitalik, you mentioned a core issue is that many things took longer than you initially expected, especially when you released the Ethereum white paper. Why did these things take longer? When you mention "taking longer," are you referring to the implementation of Proof of Stake (PoS) and the rollout of the roadmap? Which specific parts took longer than you initially envisioned, and what were the reasons?

Vitalik:

I think one of the main reasons is the complexity of software development. At that time, I lacked experience and did not fully understand its difficulty. Another reason is that we kept setting higher standards during the development process. The version of Ethereum we originally planned to launch in a few months was actually just a Layer 2 solution based on Prime Coin. However, when we saw increasing attention and interest in January, we realized that Ethereum was a project carrying the expectations of many people, and it deserved a more serious effort from us. Therefore, we decided to truly build an L1 suitable for constructing Layer 2 solutions.

At that time, there were not many L1s truly suitable for building Layer 2. Overall, these two aspects combined extended the time for technical development and prompted us to continuously raise our standards.

Overcoming Challenges

David:

Throughout Ethereum's development, you mentioned many significant challenges, which were often unpredictable, such as the DAO hard fork and the Shanghai attack incident. However, even during Ethereum's successful moments, such as the NFT boom in 2021, various new challenges still accompanied it. The Ethereum project has gone through these complex dilemmas.

I would like to ask you to talk about how Ethereum specifically developed strategies to cope with these challenges. How did this strategy gradually form among Ethereum's culture, community, foundation, and core developers? We have accumulated nearly a decade of experience; how would you describe Ethereum's unique strategy in addressing unpredictable challenges?

Vitalik:

I believe that our way of handling problems at the ecosystem level is very effective. We always try many different approaches to solve problems. For example, there are solutions based on the blockchain base layer (L1) and solutions developed directly at the application layer. In each category, there are usually multiple competing solutions being pursued simultaneously. This way, we can advance work in multiple directions at the same time and create synergies between efforts in different directions. Especially in promoting the maturity of zero-knowledge proof technology, many different attempts have played a role together.

Additionally, I think the collaborative style of the Ethereum ecosystem is impressive. Although this style is not perfect, overall, it has worked quite well.

Lessons for Young Vitalik

David:

If you had the chance to go back in time and impart some knowledge to young Vitalik or the newly established Ethereum Foundation to help them better develop Ethereum, which time point would you choose to go back to? What would you teach them?

Vitalik:

An obvious answer would be to go back to the early stages of Ethereum and tell them all our current understanding of zero-knowledge succinct non-interactive arguments of knowledge (ZK-SNARKs) technology. This technology is disruptive in many ways and is a very powerful tool.

David:

Is it to make Ethereum's zero-knowledge technology ten years ahead?

Vitalik:

Exactly. I think we took many detours in technological development or took some unnecessary side roads. If we had known the ultimate goal in advance, we could have saved a lot of resources and made progress faster. So, not knowing what the future would look like is indeed a regrettable limitation in Ethereum's development.

People often ask me what message I would send to my past self if I had the chance. Many times, my answer is simply to tell myself the correct technical direction. But I also think about whether there are other messages worth conveying beyond technology. For example, reminding myself to have more realistic expectations about timelines.

Sometimes I also wonder if there might have been better strategies on a social or economic level that would make retrospective reviews feel more ideal. For instance, could we have introduced a temporary mechanism in Ethereum's early days (2014) to allocate part of the token supply to projects supporting public goods? Even if it could only be implemented in some rough way at that time, such as deciding the allocation of developer rewards through miner voting (based on the records of the past 1024 blocks). This mechanism might have avoided explicit pre-mining while providing more ample funding support for the foundation and other organizations, and perhaps it could have won Ethereum more credibility in its early days.

I also often think about whether Ethereum could have established a closer relationship with the Bitcoin community in its early days. I feel that Ethereum did not attract more support from the Bitcoin community, which is somewhat regrettable.

Here’s a bold hypothesis: If Ethereum had adopted the formula I mentioned for token issuance from the beginning, while also being a fork of Bitcoin and announcing a shift to Proof of Stake from day one, even if the initial mechanism was not perfect, perhaps Ethereum could have become part of the Bitcoin "big block" camp. The Bitcoin big block camp refers to the community that supports increasing block size to improve transaction processing capacity. If Ethereum had chosen to stand with this camp from the start, perhaps the entire development process would have been smoother.

Of course, any choice would bring unexpected consequences. If you move forward with an existing community from the beginning, you may face many stakeholder constraints, which would limit your ability to execute certain things. So, these issues are indeed worth pondering.

Bitcoin vs Ethereum

Ryan:

I feel that the philosophy or ideology of Bitcoin seems to have gradually evolved into a nearly religious belief. This makes me wonder whether any form of forked coin is destined to lead to community division or even the disintegration of the community. However, more than a decade has passed, and Bitcoin has been around for about 16 years, so we have all grown together. It can be said that Ethereum is in a rapid growth phase, while Bitcoin is like a young person who has just learned to act independently.

Do you think the relationship between Bitcoin and Ethereum has improved? Or is this relationship only changing due to fluctuations in price ratios? I feel that when Bitcoin's price performs poorly, the Bitcoin community seems to be friendlier towards the Ethereum community. Now they seem to be much quieter, but when the price trend changes, the situation may be different. However, I feel that the hostility between the new generation of Bitcoin and Ethereum communities seems to have lessened. How would you describe this relationship?

Vitalik:

It depends on what you mean by "new generation," as I think there are different types of "new generations." Some people focus on technology, such as researching virtual machines (VM), Taproot (a privacy and efficiency upgrade for Bitcoin), OP_CAT (a script opcode that extends Bitcoin's functionality), etc. Another group, like "Michael Saylor's followers," I feel may never be particularly friendly or have particularly aligned values with Ethereum.

On a technical level, I think smart people in the tech field do indeed highly appreciate Ethereum's technological advancements and privacy protection efforts. Moreover, these efforts have not only remained at the theoretical level but have also achieved practical results. At the same time, I also believe that some people in the Bitcoin community are indeed trying to push technological advancements through OP_CAT and some new Bitcoin Layer 2 solutions (like the Lightning Network), which are very interesting efforts. Therefore, from a technical perspective, the relationship between Bitcoin and Ethereum has indeed become more positive.

David:

When you see people building technology on Bitcoin, such as trying to enhance Bitcoin's virtual machine functionality or make Bitcoin more expressive, do you think, "You're wasting your time; just come develop on Ethereum! We created Ethereum for these purposes." Or do you view their attempts with curiosity and optimism?

Vitalik:

I think it's a bit of both.

The Evolution of Ethereum's Culture

David:

I want to talk about the current stage of Ethereum. Recently, with Donald Trump's election, we have observed a shift in social trends that not only affects the crypto space but also has broader cultural implications. In a sense, this trend reflects a shift from a more feminine style associated with the World Economic Forum (WEF) to a more traditional "Bronze Age mentality." To quote a Twitter user, it seems to be a cultural trend of "out with the woke, in with the base." This cultural zeitgeist has also permeated the crypto space, with many projects beginning to emphasize their American identity. For example, the controversial Solana marketing video explicitly stated that their goal is to focus on technological innovation rather than gender issues.

(Deep Tide TechFlow Note: "WEF style" here refers to the values advocated by the World Economic Forum, which are often associated with globalization, inclusivity, and diversity, and may be perceived by some as having "feminine" traits. "Bronze Age mentality" is a metaphor pointing to more traditional and primal values, emphasizing strength, foundational construction, and traditional culture.)

However, it is worth noting that Ethereum seems to have not participated in this cultural trend shift. What do you think? Ethereum remains as it was before this cultural shift. Is this an intentional choice? Should Ethereum become a bastion against the changing tides of the times?

Vitalik:

I believe that Ethereum should be an inclusive and diverse ecosystem that can accommodate many different people and viewpoints. But at the same time, in a world with many different cryptocurrencies and ecosystems, different cultural tendencies will naturally emerge. Even if Ethereum were the only cryptocurrency, I believe cultural differences between it and other projects would still exist.

I think every project has the responsibility to create the best version of the philosophy that its members are most passionate about and comfortable with. The hope is that the end result is that we can create things that benefit the world, rather than letting projects fall into conflict or devolve into a state of merely shouting slogans. You will see one group of people shouting one slogan, while another group shouts another, feeling very righteous, but a few months later, they find that no progress has been made.

So, personally, I do feel concerned about the serious cultural shifts we are witnessing. But if you are just worried, then ultimately you will only become part of it. Therefore, the real question is how we advance, respond, and create a better competitive alternative.

In this regard, one of the new themes that emerged this year is that I am trying to restart the discussion about DAO public goods funding. I think these topics are very important. If we abandon public goods funding or any form of governance other than founder dictatorship, it could lead to many negative consequences, ultimately resulting in a return to a state of reliance on the personal authority of the founder.

But at the same time, there are indeed issues with secondary funding allocation, and token voting delegated DAOs also face many challenges. Therefore, I have been supporting prediction market-based funding and prediction market DAOs. I am collaborating with Divonch, who has done a lot of work in the public goods funding area; version two is directly based on prediction markets, essentially combining prediction markets with a jury mechanism. The idea is to assess the value of something at scale through prediction markets while combining a jury mechanism to ensure the quality of the assessment.

My basic philosophy is to try to replicate the best aspects of the free market in the field of public goods financing, creating an open order of participation. Such a system allows anyone to join, and if they do well, they have a fair chance, rather than devolving into a purely social game.

Another important thing I have been pushing for is to pay more attention to privacy; privacy has always been a core part of the cypherpunk spirit. If you remember "Chaum and E-Cash" from 1982, E-Cash at that time was not decentralized; all transactions were conducted through a centralized operator, but it was private and could protect user privacy. Due to technological limitations, we turned to Bitcoin, which is decentralized but lacks privacy features. However, now we have ZK-SNARKs, and these technological limitations have disappeared; we can actually achieve both decentralization and privacy.

Therefore, I believe privacy is a key focus we must pay attention to; privacy is freedom and an important right that we should all protect. We need to build privacy into technology. If we prioritize privacy, then the game we are participating in is about action, not empty talk.

I believe everyone in the Ethereum ecosystem should support the concept of privacy. We must continue to push in this direction.

Privacy on Ethereum

Ryan:

Let's delve deeper into this issue because I think privacy is an interesting and important component of Ethereum's culture, involving how to balance Ethereum's core values with mainstream acceptance. You mentioned Milady, which seems to showcase a "Bronze Age trend"—the front end is a Bronze Age image, while the back end involves effective policies and actual work. So how do we achieve a "Bronze Age trend" of privacy on Ethereum?

In certain areas, we have made tremendous progress in cryptography, such as the amazing ZK technology. However, in terms of the practical application of privacy, such as Tornado Cash, we still face many challenges. Especially with the ongoing trial of Roman Storm, we are still unclear about the final verdict. Whenever financial privacy is involved, the state often intervenes.

I have always believed that if Ethereum or Bitcoin had implemented privacy from the beginning, with all transactions being private, we might not have achieved the widespread acceptance we have today. This is because, when technology was not yet mature, some forces might have tried to stifle it.

So how do we find a balance that ensures privacy can develop to a reasonable level without provoking strong regulatory backlash? Currently, privacy applications like Tornado Cash and Railgun are still relatively niche, with user experiences not being friendly enough, and privacy is not a default option. Although projects like Aztec are launching, they are independent Rollups. How do we find a balance between these factors that meets user needs while allowing the state to accept this progress? What is the realistic roadmap for privacy?

Vitalik:

I think this question can be divided into two parts. The first part is how to shift privacy from a niche feature to a default part of the user experience; the second part is how to make governments and regulatory bodies feel satisfied with this.

For the first question, the reason I have not supported implementing privacy directly on Layer 1 is not because I think it is fundamentally wrong, but because I believe the technology has not yet reached a sufficiently mature stage. We are still unclear about which privacy technology is optimal. If we implement a specific technology on Layer 1, it may lead to some very undesirable outcomes. This is a challenge in any EIP, but it is particularly pronounced in privacy because the sensitive nature of privacy data means you cannot arbitrarily replace certain contents in a tree structure, making upgrades more difficult.

David:

Does this mean you believe implementing privacy on Ethereum Layer 1 is fundamentally the right direction?

Vitalik:

In the long run, I am open to that. On one hand, there is future compatibility, and on the other hand, there is security. We must remember that if privacy tools on Layer 1 encounter problems, it could lead to extremely serious consequences, such as someone being able to steal tokens without being detected. I believe that as technology matures, we will ultimately achieve this goal.

In a recent blog post, I mentioned that the number of errors in code is actually on the decline. We will eventually reach a stage where we can trust the code to a high degree, and security researchers will consider this something unimaginable in the past 20 years. I believe that the development of artificial intelligence will accelerate this process. But before that, projects like Zcash have already taken a brave step, but even so, they still face very high technical standards.

The question is, can we make privacy as much of a default option as possible without directly putting it into Layer 1? For me, the mid-term goal is to make the privacy feature in wallets a default feature. Currently, a significant error in the ecosystem is that we have created the concept of "privacy wallets." In fact, we should not have "privacy wallets"; privacy should be a feature of all wallets. Privacy features should be able to seamlessly integrate into existing wallets.

Ryan:

So if I can choose to send a normal transaction or a private transaction in an existing crypto wallet browser extension, would that default setting be feasible?

Vitalik:

Exactly. You should have a private balance and a private send button, and these features should be part of Metamask or other wallets. The Ethereum Foundation has already begun some related work internally, hoping to achieve some progress in the coming months.

Privacy Resisting State Intervention

Ryan:

Regarding the other part of privacy technology, how do we get the state to accept it? Clearly, projects like Ethereum hope to promote the development of privacy, open-source, and decentralization. However, these ideas may conflict with some governments and cultures. We want to push social and cultural progress through technology while also hoping that these technologies can be accepted by the mainstream rather than banned globally. Is there a way to strike a balance that addresses state concerns about crime and money laundering while adhering to the core values of cypherpunk? Or are these two fundamentally incompatible?

Vitalik:

First of all, I think the concept of privacy pools has made significant progress. For example, protocols like Railgun can now be put into use, and we can see some successful cases proving that it can effectively prevent stolen funds from large DeFi contracts from flowing into privacy pools. This indicates that the technology of privacy pools has matured and withstood the test of practice.

Currently, most of the illegal funds circulating through privacy protocols come from thefts of DeFi protocols or from personal accounts. In these cases, privacy protocols can actually restrict the flow of these funds through blacklist mechanisms. If your funds are stolen, you can mark them as suspicious through an API; if a DeFi project is hacked, similar measures can be taken. Therefore, this mechanism has already become a key factor in promoting the development of privacy technology.

Of course, we also need to recognize that the existing blockchain ecosystem cannot completely resist malicious actors. Various malicious actors still have many ways to transfer funds and hide their identities to avoid being tracked. However, compared to traditional financial systems, transparent public blockchains at least make transactions traceable to a certain extent. If there are issues with your funds, you can see the flow of funds through the blockchain. I believe that privacy technology can provide more privacy protection for ordinary users while increasing the resistance of malicious actors; this balance can be achieved.

On the other hand, we need to actively argue for the importance of privacy technology from a law enforcement perspective. For example, there have been multiple recent cases where telecom companies' listening data was leaked due to hacking. This data was collected and provided to the government under the requirements of the Communications Assistance for Law Enforcement Act, but the leakage of this data could actually threaten national security, as it could be exploited by other countries or organizations. Similar incidents occur frequently around the world.

The proliferation of a centralized data collection system is fragile because if these databases are hacked, the data that was thought to help national security could actually lead to instability in national security. I think this is a point that needs stronger support. Two legislators have publicly stated that actively reducing data collection is actually a safer practice. This is the direction we should move towards, and privacy-protecting finance is part of it.

Cypherpunk vs Mainstream Culture

Ryan:

I feel that you want to maintain a firm stance on privacy issues in cryptocurrency and Ethereum. This actually relates to broader cultural issues. Over the past decade, we have seen that while the ideals of cypherpunk have been attempted, they have not fully realized their ideals. Now, Ethereum is at a historic moment, gradually being accepted by the mainstream. For example, Robinhood is starting to lay out Layer 2, JP Morgan is discussing on-chain business, and Coinbase is also growing. These traditional financial institutions and mainstream culture are flooding into the Ethereum space.

However, this also brings some challenges. How will those who do not share the cypherpunk values affect Ethereum? You have mentioned the diversity of Ethereum; we do welcome more people to join, but these people may not necessarily value the core values we care about. So how should we draw the line? For example, projects like Rye may align more with cypherpunk ideals, but they have not succeeded. In contrast, stablecoin projects like Circle and Tether, while lacking in idealism, have achieved practical results in helping people in emerging countries. So how do we balance adhering to cypherpunk values with adapting to real-world needs? When should we prioritize market fit and practical use of products?

Vitalik:

I think there are several areas where privacy and cypherpunk values need to be prioritized. The first is the underlying protocol. A decentralized backend can support centralized or decentralized applications, but if the backend is centralized, only centralized applications can be built. If the blockchain itself does not support privacy or intermediary-free interactions, it cannot provide space for privacy-friendly applications.

For example, I have been promoting account abstraction (Account Abstraction) and improving EIP 7770 because if we do not do this, many use cases for smart wallets, such as multi-signatures, quantum-resistant features, and privacy protocols, may be forced to rely on intermediary ecosystems. The limitation of intermediary ecosystems is that their effectiveness is limited, and once problems arise, they can cause trouble for users. Therefore, we must ensure that interactions with Ethereum are at least privacy-friendly and do not rely on centralized intermediaries to perform basic operations.

The second aspect is that we need to ensure that Ethereum's privacy protection and decentralization implementation methods are at least feasible. This involves not only the protocol layer but also the work at the wallet layer and application layer. While most people may not choose this way, we cannot let the infrastructure be lacking or let the top-level protocols and standards be hostile to this approach.

An analogy is email. In theory, email is an open protocol, and anyone can set up their own mail server. However, in practice, due to spam issues, large service providers will blacklist these servers. Therefore, email largely relies on centralized permission control rather than openness. We need to think about how to better protect the openness of email.

Similarly, for new standards in Ethereum, we need to ensure that privacy-friendly intermediary operations are feasible while supporting self-sovereignty and avoiding unnecessary performance losses. It is acceptable if not everyone chooses this way. Even if many people still choose to hold coins on Coinbase, the key is that this choice must exist, and the design of protocols and standards needs to consider these needs.

David:

Before diving into specific topics about Ethereum, I want to ask a macro question to provide context for the upcoming discussion. There are some trends we can foresee in the future, such as AI shaping the future. We can discuss different possibilities, such as increasing geopolitical tensions, the world gradually becoming fragmented, and some exciting advancements like gene editing. Vitalik, what role do you think Ethereum will play in these future trends?

Vitalik:

I am glad that we have reached a consensus on gene editing and AI. Ethereum's role can be divided into two parts.

First, it provides a tool that protects people's freedom, autonomy, and organizational capacity, which does not rely on any individual, company, or country. In an increasingly fragmented world, this capability is particularly important. Looking back fifteen years ago, many people were willing to trust Facebook, but now we almost unanimously agree that only blockchains are trustworthy. Therefore, in the market of trusted technology, it is now ready. There are many people willing to pay for these technologies, and many people care about social issues and want to be part of the solution with these technologies. This lays an important foundation for the development of technology.

The second part is building a global community. Ethereum attracts a group of people who care about decentralized finance, innovative organizational forms, privacy protection, and democratic governance. This strong intellectual appeal makes Ethereum a unique community asset. Even in a hypothetical future, such as discovering the solution to the NP problem tomorrow, leading to the inability of all blockchains to continue to exist, the Ethereum community itself still has irreplaceable value.

World Ledger

Ryan:

In the early stages of Ethereum, people often referred to it as a "world computer." However, the popularity of this concept has gradually declined. Earlier this year, you mentioned in an article that Ethereum is a "world ledger," which I think is a more accurate and concrete statement. Although it may still seem abstract to some, to me, it means that Ethereum can serve as a global tool for recording important information like property.

I have been pondering a question: what exactly is Ethereum? I tend to think of it as a decentralized property rights system. While this definition may be somewhat difficult for the average person to understand, do you think the positioning of "world ledger" accurately encapsulates Ethereum's core mission?

Vitalik:

I believe that "world ledger" is indeed a more accurate description. Compared to "world computer," the concept of "ledger" is more concrete and better conveys Ethereum's core values. The term "world computer" is too broad; a computer can perform many functions, such as generating cat pictures, translating text, or even making videos, but these functions do not fit Ethereum's scenario, especially on L1.

The term "ledger" focuses more on economic value; it encompasses applications in the financial domain, such as DeFi, and can also extend to other areas, such as ENS (Ethereum Name Service). Therefore, when I mention that Ethereum L1 is a global ledger, it not only helps clarify its positioning but also more clearly explains the relationship between L1 and L2. The goal of this expression is to make it easier for people to understand Ethereum's role. If everyone can accept this definition, then it indicates that this positioning is successful.

David:

If Ethereum is the world ledger, then what is ETH?

Vitalik:

That's an interesting question. If we compare the ledger to a book, then ETH is like the "ink" used to write the ledger. We can further extend this analogy: the ink can represent the functions of L2. If the ink is marked with TM (trademark symbol), it means it is a branded L2; if there is no TM symbol, it is an unbranded L2. This analogy might help us better understand ETH's role.

Outlook for Ethereum in 2024

David:

I think your point makes sense. Next, I want to talk about the current situation of the Ethereum community in 2024. Personally, I believe that 2024 is a difficult period for Ethereum. The continuous decline in ETH prices has not only impacted the entire ecosystem but has also led to some divisions within the community. What do you think? Do you believe that 2024 is indeed a difficult period for Ethereum? How would you explain this? If you were to tell the story of Ethereum in 2024, how would you describe it?

Vitalik:

I believe that the continuous decline in ETH prices is indeed one of the core reasons for many problems. For many people in the community, another important factor is that many once-popular topics and projects are gradually losing attention, while new alternative projects have yet to emerge. For example, some people had high hopes for DAOs, but when the development of DAOs stagnated, they felt lost and did not know what to focus on next.

Additionally, the NFT market has also gradually cooled in 2024, while at the same time, memes have experienced explosive growth this year. However, the rise of memes seems to have primarily occurred on Solana rather than Ethereum. The core values of the Ethereum community are to promote freedom and openness, but the popularity of memes has not significantly contributed to these goals, leaving many people confused.

Another important challenge is the relationship between L1 and L2. Some people in the community believe there are issues with the collaboration between L1 and L2, especially regarding incentive mechanisms. When people realize that the interests of the two may not align, the divisions within the community become more apparent.

2024 is the result of multiple factors coming together. On one hand, the decline in ETH prices has put pressure on the ecosystem; on the other hand, many once-popular projects and topics are gradually coming to an end, while new alternative projects have yet to successfully take over. I believe that the future direction must be new projects that can bring real benefits to the community and gain widespread support. In fact, I feel that by 2025, we are beginning to see some positive changes, and perhaps these issues are gradually being resolved. This is also one of the reasons why we can feel more hope now.

Changes in the Ethereum Foundation

David:

Currently, the Ethereum community is still discussing various issues in 2024. Some of these issues may just be narrative psychological operations (narrative PSI ops), while others are real challenges that need to be addressed. One core topic is that Ethereum's "rollup-centric roadmap" seems to have deviated from the original vision. The fragmentation between chains is severe, with each chain and each L2 resembling an independent system, and L1 has not genuinely attempted to scale. This roadmap seems inconsistent with Ethereum's goal of being a global unified computer.

At the same time, the Ethereum Foundation has also undergone adjustments. Can you explain why these changes have occurred? What aspects does the foundation need to improve? What is the current state of the Ethereum Foundation?

Vitalik:

I think these changes have actually been brewing for a long time; they just needed some triggering factors to push them to happen.

The leadership changes in the Ethereum Foundation are a typical example. For instance, Aya now serves as the chair of the board, and she seems to be more adept in this role while still actively participating in some specific projects, such as promoting the application of Ethereum in Bhutan. She is also very interested in topics related to Russell and financial inclusion, dedicating more time to them. These changes indicate that the position of executive director is not suitable for being held by the same person for a long time.

My tenure has been relatively long, so the leadership changes also include adjustments to my role. Additionally, the foundation has brought in some new voices and new focuses, such as Tom and Shelley, who each have expertise in the technical field.

Meanwhile, various departments and projects within the foundation have welcomed many new leaders. For example, work related to scaling and user experience is undergoing reorganization. One area I am currently focusing on is how to better organize matters involving censorship resistance and privacy. This means we are transitioning from the theoretical exploration phase to the phase of implementing privacy technology in practical production environments. Many new and interesting projects have been launched. I believe these changes would have naturally occurred at some point, but some key events accelerated this process.

Regarding the issues of L1 and L2, I believe they are not directly related to the adjustments in the foundation. Clearly, increasing the gas limit of L1 is an important topic for the foundation, and we are also working to improve interoperability between L2s.

In fact, this work began in mid-2024, but the process has accelerated due to some events in early 2025. Improvements in L2 interoperability are ongoing, and many L2s have achieved their first-phase goals. Next, our focus is on shortening withdrawal times. The current goal is to reduce withdrawal times from one hour to a few minutes, or even possibly to 12 seconds. This depends on how much gas users are willing to pay. If withdrawal times are too long, such as an hour or even a week, then the efficiency of native deposits and withdrawals will be very low.

Therefore, issuing assets based on L1 may not hold an advantage in the long term, while those relying on custom minting and burning bridges may ultimately concentrate power under multi-signature control. To make L1-based methods competitive, we must significantly shorten withdrawal times.

If withdrawal times can be reduced to one hour, liquidity will become cheaper, and in some cases, even free. If it can be shortened to 12 seconds, we may see more users accessing assets through L1. These improvements require the collective efforts of the entire ecosystem, including the foundation's internal teams, L2 projects, and technical development teams like zkEVM. Overall, this is a complex multi-party collaboration process that requires time and resources to achieve.

I am optimistic about the progress in addressing these issues. We need both a strong L1 and a clear relationship with L2 systems. While all technical steps still require time to complete, overall, we are moving in the right direction.

Economic Collaboration

Ryan:

I still have some concerns about the rollup roadmap. While we have made some successes in deploying rollup technology, such as Robinhood's recent promotion, I worry that we are not paying enough attention to different stages of user property rights on Ethereum L2.

The first stage has made some progress, and I believe the second stage will also proceed smoothly. However, we are not placing enough emphasis on the coordination between L1 and L2 layers. While some user experience and standard issues can be resolved through tactical adjustments, I am more concerned about the overall lack of collaboration. If we enter a state where, as you mentioned in 2021, Ethereum is decentralized, L1 is also decentralized, but there may be a large rollup chain where all execution states are concentrated, I worry that L2 may become stronger than L1, dominate the rules, and even potentially detach from Ethereum. This situation seems to lack a good economic balance. The relationships between different chains and brands are also not as close as the past Ethereum L1. How do you view this issue of economic collaboration? Do you think we can solve it? Or does it still require a long time?

Vitalik:

I agree with your view. I think the issue of economic collaboration can be viewed from two angles. One angle is the fee issue of L2. Currently, the base fees of L2 are relatively low, and I believe that appropriately raising fees may improve many issues. However, I am not sure if fees are the most critical variable. I think a more important factor is network effects.

Another important concern is withdrawal times. If all assets are issued on L2, and users transfer assets through minting and burning bridges, then the participation of L1 will significantly decrease. Maintaining the core position of L1 is crucial; even if most activities occur on L2, assets should still be issued on L1. This is not only safer from a trust perspective but also addresses governance and upgrade issues of L2. If assets are issued on L2, users must trust that L2 regardless of how they transfer assets. However, if assets are issued on L1, users can rely on L1's final adjudication through native withdrawal functions. This model enhances security and allows users to move freely from one L2 to another, promoting the development of applications across multiple L2s.

Therefore, encouraging the issuance of assets on L1 and making it economically viable is crucial for maintaining the core position of L1. I think we should strive to achieve this goal.

In addition, raising base fees to a reasonable level will also help. At the same time, we should continue to explore how to achieve synchronously composable blocks, such as allowing L2 to interact with L1 in real-time. This model can allow the value of L2 to derive more from collaboration with L1 rather than being just an independent chain connected through bridges.

Scaling L1

Ryan:

David and I are mainly focused on the social layer of Ethereum. We believe that to achieve a powerful impact in a low-key manner while enhancing the soft power of Ethereum L1, we need a stronger L1. This is not only from the perspective of increasing transactions per second (TPS) but also making L1 the core of decentralized finance (DeFi), the hub of liquidity, and the primary platform for asset minting. The stronger L1 is, the more effectively it can attract and guide L2, providing them with liquidity support, which is also why they are closely connected to Ethereum. We are very excited about the initiative to enhance L1 performance.

In recent discussions, it seems there are some new trends, especially under the leadership of the new Ethereum Foundation (EF), where enhancing L1 performance has become a top priority. Can you share your perspective on why enhancing L1 performance is so important?

Vitalik:

The key issue is always how to scale L1 while ensuring security. Security means not compromising the stability of the network, not completely centralizing node operations, and not undermining the staking ecosystem. I believe that the technologies we have now, such as zero-knowledge virtual machines (ZKVMs), did not exist a few years ago. This year, it is almost ready for production, whereas it was impossible just a year ago. Therefore, many people are actively pushing for the development of this technology.

We plan to increase the block gas limit by 3 to 5 times. If this leads to the bottom 10% of individual stakers being eliminated due to insufficient resources, we will not ignore these stakers; rather, we hope they can use ZKVM technology to validate the chain instead of manually re-executing everything. This approach is secure because it is acceptable for 10% of nodes in the network to rely on ZKVM technology as long as that proportion remains below one-third.

As ZK technology matures, we can begin to strategically apply it in different areas. This can be seen as the process of L1 entering its first phase, and as the security of the technology improves further, L1 will enter a state equivalent to the second phase.

Additionally, there are other technologies that can help enhance L1 performance. For example, the historical storage issue has long occupied a large amount of space for nodes. We recently implemented a basic historical data cleaning mechanism that deletes historical data before the merge, reducing the storage requirements for each Ethereum node by hundreds of GB. In the future, we plan to further optimize this, ultimately achieving historical data expiration after each network upgrade, with a long-term goal of making data expire after 36 days. To achieve this, we need a peer-to-peer distributed storage network to ensure the complete accessibility and verifiability of the chain.

Another technology worth noting is gas repricing. The Block Access OS is also an important innovation. It allows each node (except the node creating the block) to execute blocks with maximum parallelism. The node creating the block must execute sequentially, but the hints it generates can allow other nodes to verify and re-execute the block in parallel. This mechanism enables Ethereum to run securely at higher gas throughput.

Therefore, we now have many technological options, and these technologies have been well optimized. We have more tools than ever to find a balance between scalability and security.

Ryan:

Do you think that by combining these technologies, we can achieve the goal proposed by Don Krad of increasing Ethereum's transaction volume from the current 20 transactions per second to 10,000 transactions per second in the next three to five years while maintaining Ethereum's decentralization? Do you think this goal is realistic?

Vitalik:

I have become somewhat less confident in some high-end goals, but I think the issue mainly lies in the ultra-short block times rather than the ultra-high TPS. If I had to choose, I would say that 10,000 transactions per second with a 12-second block time is safer than a 1-second block time. Because in these extreme cases, we will encounter very fundamental decentralization issues like the speed of light. So I personally think we should be cautious about high-end metrics, but I do believe there is still a lot of room for optimization.

From a decentralization perspective, I think we will be in a very difficult position to judge, but in reality, I hope that in many important aspects, decentralization can be further enhanced. I can give an example to illustrate my point. For instance, people usually complain that not many people are actually running nodes and instead rely on RPC services. I think we finally have a very reliable roadmap to get out of this situation. Part of this, of course, is Helios—being able to run light clients in wallets, and its efficiency is continuously improving.

Another important reason is that cypherpunk types of people often value the privacy of personal node operations. I did not realize this until I spent time communicating with some of them. Running a personal node can provide strong guarantees for privacy. For example, if you use Ethereum's privacy protocol and conduct different operations through multiple accounts while being very concerned about your privacy not being leaked, if you still query the balance of each address through Infura, then Infura knows all your linkages. Running your own node can completely avoid this issue because you only need to download the blockchain data, and all queries are done locally, with no one knowing what you are reading.

So the question is, how do we achieve both? The answer is that we can do this soon. There are two paths to achieving this goal. The first path is to improve the efficiency of the current Ethereum node concept. Specifically, this can be achieved through radical historical data expiration strategies and not storing all data. In fact, you do not even need to store branches of the state tree; you only need to store a state table, which only requires 80 GB.

If you have a block-level access list and use zero-knowledge proofs (like zkVMs) to verify the correctness of the block-level access list, then you can maintain the updates of Ethereum's state with almost no local computation, only needing to maintain an 80 GB local database. An 80 GB storage requirement is very small; it is equivalent to the size of 3 to 4 different LLM models. Nowadays, almost everyone's device has 80 GB of storage, such as my phone.

However, if we expand L1 in a moderately conservative manner, such as expanding it by 30 times, then obviously 80 GB will become 2.4 TB. A storage requirement of 2.4 TB would return to the level currently required to run a full node. In fact, we have already provided ourselves with 30 times the expansion space. But if we want to expand further, we can adopt the concept of partial state nodes, only storing the states related to the top 100 applications and all EOA and smart contract data. This approach would significantly reduce storage requirements.

The second path is to start from browser wallets and add more safeguards to them. The first part is Helios, where light clients can verify the chain. The second part is to use short-term technologies like TEEs and Oram. In the long run, PIR (Private Information Retrieval) can be used, which has trust properties at the encryption level, allowing requests to be sent to the server without the server knowing the content of the request. At the same time, the server will respond to the request, but it completely does not know what it just responded to. Once this technology is standardized, you can actually achieve strong privacy guarantees.

For example, you can have a light client that not only provides the same security properties as a full node but also offers the same privacy properties without actually running a full node. Essentially, we have several different paths to provide users with decentralized properties that were not achievable even in 2017.

Even in the early stages, before L1 begins to scale significantly, I believe we have achieved greater scale, higher decentralization, stronger privacy protection, and better censorship resistance in many aspects. At the same time, there are also some areas that concern me, such as continuously ensuring that Proof of Stake remains decentralized and that block construction remains decentralized, which need to be focused on. I think having many different high-quality research teams focusing on different areas and methods will be very valuable in this regard.

Overall, I believe we are actually making very good progress in simultaneously increasing decentralization and scale; we just need to keep working at it.

Ethereum's Barbell Strategy

David:

"If Ethereum as L1 directly participates in the high-frequency trading (HFT) game, it will fundamentally undermine Ethereum's core values, as excessive pursuit of HFT will lead Ethereum away from its original intention." I don't quite understand this conclusion. Can you explain why participating in HFT would harm the core values of L1? How does Ethereum's L1 scaling strategy address this issue?

Vitalik:

The core reason is that if we overly optimize for one aspect, such as the low latency of high-frequency trading, we will sacrifice other key attributes, ultimately leading to an imbalance in the entire ecosystem. This is similar to discussions in the AI safety field: when certain technologies are pursued without limits, they may bring about unexpected negative outcomes.

In high-frequency trading, low latency is key. To achieve lower latency, participants in the ecosystem will be incentivized to continuously optimize their technologies and setups, and this optimization has no natural stopping point. Ultimately, this trend may lead to the gradual abandonment of Ethereum's global decentralization. For example, if we set the block time to 1 second, then the propagation and confirmation times of blocks must be controlled to be within 500 milliseconds each. This would force the network to make extreme optimizations in peer-to-peer communication and would also create strong "co-location incentives."

The so-called "co-location incentives" refer to participants striving to place their servers as close as possible to the block proposer’s server to significantly enhance transaction speed and competitiveness. For instance, as a participant in decentralized finance (DeFi), you would want to send transactions as quickly as possible to get the latest market information; as a developer, reducing latency by even 5 milliseconds could allow you to send 1% more transactions within a block, thus bringing more profit.

The reality of high-frequency trading is that all participants will compete to concentrate their servers together in pursuit of the lowest latency. Therefore, I think it is reasonable for Ethereum to adopt a "dual strategy": L2 is responsible for handling transactions that require centralization, such as high-frequency trading; while L1 focuses on providing security and censorship resistance. In this way, L2 somewhat isolates L1 from co-location incentives, avoiding the risk of excessive centralization.

The independent ordering mechanism of L2 is one of its advantages. This is also why I have recently become less interested in the Base Layer and more focused on L2. L2 can leverage the efficiency advantages brought by centralization while maintaining decentralization in governance, which is a very effective balancing act. Therefore, L2 can well meet the needs of high-frequency trading.

If we look further ahead, the thinking speed of AI is 1,000 times that of humans. From the perspective of AI, subjective light speed is only 300 kilometers per second. With the emergence of AI, the concept of a global financial ledger may no longer be reasonable. What we need at that point is a city ledger, and L2 is precisely such a natural choice.

If L1 starts to move in this direction, many centralized incentives will accumulate. If we commit to competing in the high-frequency trading space, it means we need to optimize extremely in an environment where others do not value decentralization.

Therefore, I believe that a "dual strategy" is the right choice. L1 does need improvement, especially in terms of block time. Bitcoin's 10-minute block time is clearly too long. If Bitcoin's block time were set to 20 seconds instead of 10 minutes, I believe it would significantly change its development trajectory.

L1 should have moderately low latency to meet the needs of ordinary users; for scenarios that require extremely low latency, such as high-frequency trading, L2 is a better choice. We need to find a way for L1 and L2 to work together to achieve balanced development of the entire ecosystem.

Ethereum Nationalism

David:

In your response, I heard a viewpoint I often hear, which is about the downstream of products. You and Ryan often mention a blog post discussing "open" and "focused" ecosystems. For example, Bitcoin belongs to a focused ecosystem, building its culture around the limit of 21 million hard caps. Solana, on the other hand, focuses on low latency and high-frequency trading, which has become its core value.

In contrast, Ethereum tends to lean towards an open ecosystem, trying to keep all possible choices open and pursuing a balanced middle path. However, I really like something you once said: "Everything should be moderate, including moderation." Following this logic, Ethereum should maintain balance in many aspects, but in certain key areas, it also needs to focus.

My partner Ryan advocates for a cultural pride in Ethereum, which he calls "Ethereum nationalism." How do you define this cultural pride? In what aspects should Ethereum's culture and values be more prominent?

Vitalik:

This is a very interesting question. The discussion you mentioned about Ethereum as a nation is also thought-provoking. First, I think an important point is that the complexity of the world far exceeds simple single choices. The success of Ethereum largely stems from its multi-layered structure. This structure allows us to achieve the best of both worlds in different areas.

I can illustrate this with an analogy to nations. Some people believe that a country managed by a dictator may be more efficient because the dictator does not need to negotiate with others and can quickly push large projects to improve society. Of course, I do not support dictatorship, as its drawbacks far outweigh its benefits. However, it is worth noting that dictatorship does exhibit efficiency advantages in certain aspects. Democratic capitalism can be seen as a framework that incorporates the advantages of dictators while avoiding their drawbacks. In this framework, the "dictator" can be entrepreneurs who control significant resources and create results through efficient resource allocation.

However, this model needs to be strictly maintained. If entrepreneurs deviate from the framework and set their own incentive mechanisms, then this balance will be disrupted, and the drawbacks of dictatorship may become apparent.

This analogy also applies to Ethereum's L1 and L2. L2 designs are usually more centralized than Ethereum L1, while also tending to be more conventional in user experience. Ethereum L1, on the other hand, places more emphasis on cypherpunk values, such as decentralization and censorship resistance.

If designed properly, we can establish mechanisms on L1 to constrain L2. For example, proof systems can ensure that L2 does not falsely claim certain information as true, thus protecting user funds. Additionally, there are bypass mechanisms; if L2 starts to censor users, users can force transactions to be included in blocks to retrieve their assets.

These bypass mechanisms have already been applied in reality and are very interesting. Another example is that if a centralized sorter performs poorly, we can replace it through on-chain tools. Users can vote to decide whether to replace the sorter, ensuring fairness and efficiency in the system.

This leads to a core advantage of Ethereum: it is an ecosystem with diverse roles. The task of Ethereum is to design reasonable incentive mechanisms to maintain balance among these roles. A strong L1 is an important part of these mechanisms because it can prevent entrepreneurs from deviating from the framework.

If the proof system is theoretically effective but cannot support all users to exit simultaneously in practice, then the entire system will collapse. Therefore, the role of L1 is to establish these frameworks and find a balance between scalability and decentralization, allowing users to make free choices.

I believe the greatest value of Ethereum lies in its openness. It is like a sandbox that allows people to experiment and innovate in different directions.

ETH Treasury

Ryan:

We can continue discussing this topic. We often compare Ethereum to a nation, and this analogy can also extend to assets. Every country has its own currency, and some even possess world reserve assets. We can refer to this as the social layer of Ethereum, and part of the cultural pride in Ethereum is to view ETH as the bond connecting the entire ecosystem. Let's explore a few related concepts.

First, I want to ask you what you think about the emerging ETH treasury companies. For example, Tom Lee mentioned in a podcast that he hopes to acquire 5% of the ETH supply. To do this, it would clearly push up market prices. What do you think of these institutions? Do you see them as a good thing, a bad thing, or irrelevant?**

Vitalik:

Regarding this issue, I believe the core value of ETH lies in its foundational role in the entire Ethereum ecosystem, being the key asset recognized by everyone. Therefore, it is crucial to maintain ETH's strong role. If different organizations within Ethereum, such as Bankless and the Ethereum Foundation, are completely inconsistent in their incentive directions with almost no overlap, then Ethereum as a unified community may face the risk of collapse. This is why we need to protect ETH's role and ensure it is the core of the entire ecosystem.

I have many theories to explain the sources of ETH's value. Sometimes, I feel that these theories cannot fully explain ETH's price movements. The price of ETH seems to be determined by some mysterious forces, as if 14 demons living on Jupiter are manipulating it, and the market's discourse is merely trying to cater to the preferences of these forces.

Nevertheless, from a more practical perspective, building a central ecosystem related to the global economy and financial applications is still the right direction. Therefore, transaction fees, network effects, and so on are all important factors supporting ETH's value.

As for these treasury companies, I find their operational methods somewhat confusing. They do not directly use their own funds; instead, they raise funds by issuing shares and then use that money to purchase ETH. In a sense, they create a leveraged financial product based on ETH, positioned between auctions and derivatives. This model clearly attracts many participants and has gained market recognition.

David:

Which one do you like the most?

Vitalik:

My favorite ETH treasury company? Probably the U.S. government, as they have accumulated a lot of ETH through confiscating hacker funds, which is quite interesting.

Ryan:

Let me defend these ETH treasury companies. To some extent, these companies provide a new coordination mechanism for ETH, helping to spread the value story of ETH. This mechanism is similar to the successful path of Bitcoin, extending ETH's influence into mainstream finance. While they may carry the risk of excessive leverage, for now, these activities are improving the health of the Ethereum ecosystem. As traditional finance increases its focus on ETH, capital inflows will also grow. This not only enhances the security of the community but also provides resources for developing more cypherpunk innovations.

From the current situation, the activities of treasury companies holding 0% to 1% of the ETH supply seem to have brought positive effects. This is also why I believe ETH treasury companies are beneficial.

Vitalik:

I agree with your point. I believe that the social coordination mechanisms around ETH, such as being part of treasury companies, are a great complement. This allows people to participate in the Ethereum ecosystem in different ways based on their financial situations and needs. Therefore, these treasury companies do indeed provide very valuable services.

Of course, if three years from now you tell me that these treasury companies led to the decline of ETH, my guess is that they may have turned into an overly leveraged game, leading to a market price crash, triggering liquidations, and ultimately resulting in a more severe downturn, along with a loss of credibility. But I believe that participants in the Ethereum ecosystem, including those engaged in financial activities, are responsible and will not take risks lightly. Therefore, as long as leverage levels remain moderate and these mechanisms are not overly complex, I believe ETH derivatives are a fundamental way to achieve financial stability, so I support the existence of these treasury companies.

The Next Decade for Ethereum

David:

In the long run, some ETH treasury companies may still exist ten years from now. This is also one of the reasons people feel excited, because if these companies can operate correctly, they will have the opportunity to withstand the test of time. But I want to shift the topic to the next decade for Ethereum. When Ethereum turns twenty, we hope to invite you back to the podcast to talk again. Although we may all be old by then, Ethereum will still be vibrant, after all, it will just be twenty years old.

Vitalik, Ethereum is a continuously evolving project, and its work will never truly end. While we can make it better and better, I believe there will never be a day when it is "100% complete." So, in the next ten years, what are your expectations, dreams, and goals for Ethereum's development?

Vitalik:

From a technical perspective, I hope Ethereum can approach some kind of "finish line" and enter "maintenance mode." This means we need to complete key technological upgrades, such as fully adopting ZK proofs (zero-knowledge proofs) and replacing existing components with optimized technologies. For example, replacing the Kajak hashing algorithm with a more efficient Poseidon, and replacing the EVM (Ethereum Virtual Machine) with RISC-V or other more advanced technologies. Ultimately, we hope that all validations can be completed through ZK proofs.

Additionally, I hope Ethereum's nodes can become extremely lightweight, while privacy protection can become the default user experience. Starting with payment privacy, gradually expanding to more complex decentralized finance (DeFi) applications. At the same time, we need to develop a self-custody solution that supports user self-sovereignty while being suitable for ordinary users. I believe this is achievable, and I hope we can reach this goal. Furthermore, we also need to perform formal verification on all systems to ensure their security and reliability. If we can create an affordable and open-source ecosystem that extends from DApps (decentralized applications) to Ethereum clients and then to hardware, that would be an ideal state.

From a social impact perspective, I envision Ethereum becoming the default platform for global financial activities. If we can realize a world where users can freely extract assets from one application and transfer them to another, and the entire process is governed by legitimate permissions, that would be very exciting. At the same time, we need to ensure that users have strong privacy protection options, such as being able to easily transfer funds from one wallet to another. These are all crucial goals.

The future I envision is a trustless secure world based on cryptography and code verification, where this security will become the default standard of society. We will enter an era where we can strongly guarantee the security of systems, and the approach of "relying on trust to ensure security" will gradually be eliminated, just like today's "unclean water."

I think this is an exciting vision. We have already achieved this goal in the internet space through HTTPS, and Ethereum can play a similar role in other areas, promoting the popularization of this security standard.

Vitalik's Next Decade

Ryan:

Vitalik, you wrote the Ethereum white paper in 2013 when you were still a teenager. Now, ten years have passed, and Ethereum has grown into a network with nearly one trillion dollars in assets. The whole world seems to be increasingly building its ecosystem on this global ledger. In the next decade, what do you think your role in Ethereum will be? Will you continue to participate? Will you fulfill your vision? What does this future look like for you?

Vitalik:

Yes, I think continuing to participate in the development of Ethereum is very important. Ethereum is undoubtedly one of the core parts of this. Over the past few years, I have been deeply involved in this project, and I expect to continue to invest energy in it while expanding into some broader areas, such as decentralized autonomous organizations (DAOs). We have also discussed some cross-domain issues, such as bio-defense and underlying security, which I believe are equally important and closely related to Ethereum's technology and philosophy.

My goal is to help realize an open, secure, and trustworthy ecosystem that includes not only Ethereum but also many other areas, such as global technological standards and social infrastructure. I anticipate that this will be an important focus for me in the next decade. This aligns with my original intention since joining the Bitcoin community in 2011: to promote a fairer and more transparent world through blockchain technology. I am excited about this because we now have the opportunity to put this vision into practice and truly change the world.

The Future of Bankless

David:

Bankless has accompanied Ethereum through about five years of development, which is exactly half of the ten-year history of blockchain. Ryan and I may continue to do so, right?

Ryan:

Of course, David. So, Vitalik, do you have any advice or guidance on how Bankless should maintain a close connection with Ethereum in the next five to ten years?

Vitalik:

I think you have been doing an excellent job, always focusing on the core content of the Ethereum ecosystem and covering many different and valuable areas. I think it is very important to continue maintaining this focus and stability. At the same time, many new directions worth paying attention to will emerge in the future, such as breakthroughs in privacy technology, the development of a new generation of DAOs (decentralized autonomous organizations), and some bold ideas, such as shaping Ethereum into a nation-like ecosystem. These emerging areas will require ongoing support and reporting, and you can play an important role in them.

So, this is indeed a vast field, and I am very grateful for the work you have done in this area.