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Buterin continues to bet on Ethereum as the Internet of money

Su Zhu, chief executive of Arrow Capital, points to an opportunity that could be an obstacle to ethereum’s development. Several analysts said Ethereum had become one of the driving forces behind the cryptographic market’s rally in recent months. Ethereum’s DeFi unit continues to break its all-time high in total value, nearing $7 billion when published. But, he warned, there are dangers. Su Zhu, chief executive of Arrow capital, explained why Ethereum had become an “unshakable network” but also criticised its “opaque” governance. Meanwhile, Ethereum’s inventor, Vitalik Buterin, says he will continue to support the vision of Ethereum as a “currency Internet”.

Zhu provided his explanations on the POV
Crypto Podcast. There he acknowledged that the current bull market did not
happen because of the investors who are chasing after Bitcoin‘s “digital gold”
narrative. On the contrary, Zhu stated that the bull run is based on the number
of investors who are looking to Ethereum’s DeFi for “the profits they can’t
make with the banks”.

Within the Ethereum community, some users
have expressed their concerns about the possibility that Ethereum becomes a
“DeFi network” only. Increased transaction fees and network congestion show
that Ethereum could be at the limit of its capabilities. In that sense, Zhu
commented that Ethereum has already reached its limit.

However, the growth of the DeFi sector
could be costly for the future of the Ethereum. According to Zhu, Ethereum has
become “unforkable” because of how much the ecosystem and the DeFi sector
depend on the current state of the network:

I do think that Ethereum is unforkable now
because of the way that things depend on it to run. It’s not going to be able
to do a do-over like it did in 2016. So I think that, because of that, there’s
very high stakes stuff now happening on Ethereum that may or may not be ready
to handle as a platform.

The CEO of Three Arrow Capital added that
in addition to the problem of high fees, Ethereum could have other
vulnerabilities, for example in its governance model. Zhu said Ethereum’s
governance model is “opaque” and therefore fails to make quick decisions when
needed. Furthermore, he asserted that Ethereum has failed as a “world
computer”:

There are many concerns that the
application layer is running beyond what Ethereum can handle (…) For me these
are its two biggest problems. Its governance layer is very “opaque” (…) nobody
knows how to reject something in Ethereum correctly, nobody knows how to do
something quickly in Ethereum (…) I think it has failed as the world computer,
I think that has died.

The CEO of Three Arrow Capital also added that investors, at least those located in Asia, are attracted to Ethereum because of its utility. In that sense, Ethereum’s network could lose its current momentum if it becomes a platform unable to implement change, to update itself, and to maintain its position as a leader among potential competitors. In line with that, Zhu said there is still time for an Ethereum competitor to emerge.

On the other hand, Ethereum inventor
Vitalik Buterin has revealed in a debate that he continues to support the
vision of Ethereum as “the internet of money”. In response to an article by
journalist Nic Carter, Buterin also revealed that he opposes the current state
of the Ethereum network which has high fees. Therefore, Buterin stressed the
work that the developers of the Ethereum Core are doing to deploy rollups and
Ethereum 2.0

Both will be a solution that will give more
scalability to Ethereum’s network. However, Buterin also acknowledged that
Ethereum is currently in a “fee crisis”, but denied agreeing with this
situation. In that sense, Buterin said that the community and developers have
not abandoned “the dream” of Ethereum becoming a platform that can also support
non-financial applications, but admitted the following:

The present situation is simply a matter of
trying to deal with suddenly very high demand before the technology to properly
handle it is available. It’s not a reflection of a state of affairs that Ethereum
people *like*.

Author : Reynaldo

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