Buterin: Overcollateralized Algorithmic Stablecoins Define Real DeFi

Ethereum co-founder Vitalik Buterin and crypto analyst c-node reignited the debate over the true purpose of Decentralized Finance, challenging the booming industry to rethink its priorities. c-node argued that much of today’s DeFi hype is superficial and serves speculative interests rather than advancing genuinely decentralized infrastructure.

They wrote that “there is no reason to use DeFi unless you have longs on cryptocurrencies and want access to financial services while preserving self-custody,” dismissing common yield strategies like depositing USDC into lending protocols as “cargo cults.” Buterin offered a broader framework for what counts as real DeFi, saying algorithmic stablecoins—particularly when overcollateralized or structured to decentralize counterparty risk—qualify as genuinely decentralized.

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