DeFi: USDC on Ethereum Better than Account-to-Account Transfers, Says Vitalik Buterin

Vitalik Buterin, the co-founder of Ethereum, recently responded to a query on Twitter regarding his preference for USDC over DeFi, which is arguably more profitable for the Ethereum blockchain. The question was posed by Millie, a self-proclaimed crypto philosopher, who questioned Mr Buterin’s stance on the matter.

Millie expressed his confusion over Buterin’s preference for USDC, stating that much of Ethereum’s value comes from using ETH as collateral in DeFi. “Why on earth would you want to see fewer DeFi protocols being built?”, Millie added, calling it an unimpressive use of cryptocurrency.

Millie suggested that while he cannot read Buterin’s mind, he believes the Russian-Canadian programmer favors USDC because he views DeFi as not fully decentralized due to their reliance on “trusted oracles and multisigs.” Millie mentioned that Buterin might, therefore, encourage more “pure DeFi” with no external dependencies, like Uniswap.

Millie further criticized Buterin’s view on DeFi, calling it discouraging and pitiful. He expressed concern that such views could demoralize those who support and defend Ethereum in the decentralized crypto space.

Responding to Millie’s comments, Vitalik Buterin clarified that he believes decentralized exchanges and stablecoins like RAI are excellent, and, in fact, he thinks RAI is better than USDC. However, he emphasized that he is more interested in applications that offer a sustainable use case while remaining permissionless and decentralized.

Buterin acknowledged that while USDC is less ideal than RAI, it offers more convenience, which is why many people use it. “It’s incredibly useful for me personally when doing international donations, way more convenient than banking,” Buterin said.

He highlighted the importance of fostering a free and open global economy and society that allows people to transact easily with cryptocurrency — a real-world use case that stablecoins provide. “USDC on Ethereum is also far better than account-to-account transfers inside centralized exchanges,” he voiced.

Buterin elaborated that the widespread use of USDC is a step toward encouraging the use of decentralized stablecoins. He concluded by stating that traditional sources of finance are insufficient today, hence the need for “intersections between decentralized finance and other decentralized technologies.”