Vitalik Buterin believes crypto still ‘needs time to mature’ before mainstream adoption
Following the ongoing debate over crypto regulation, Ethereum founder Vitalik Buterin joined the discussion in a series of Twitter posts over the weekend. FTX CEO Sam Bankman-Fried has been the subject of much criticism for his views on DeFi regulation. “I feel it’s unfair to allow other people to be attacked with his CT, but I never really stick my head out,” Buterin said.
Vitalik argued that the crypto industry should not pursue “large institutional capital at full speed.” Ethereum’s founder explained that the industry needs to “play freely” and that delays in mainstream adoption are healthy for the space.
“Regulations that leave the crypto space free to act internally, but make it harder for crypto projects to reach the mainstream, are far worse than regulations that undermine how crypto works internally. There is none.”
However, unlike the SBF, who argued that keeping crypto regulation free at the protocol level may require compromises, Vitalik believes rules that slow adoption while keeping crypto completely open are desirable. increase.
According to Vitalik, regulations on front-end DeFi products that require any form of KYC are useless in deterring hackers. Since hackers write code that interacts directly with smart contracts, the front end of the project is usually ignored by bad actors.
Fundamentally, especially at this point, regulations that allow the crypto space to behave freely internally, but that make it difficult for crypto projects to reach the mainstream, are regulations that undermine how crypto works internally. It’s not much worse than
—vitalik.eth (@VitalikButerin) October 30, 2022
Vitalik also outlined some regulations that could improve DeFi.
“(i) Leverage limits
(ii) require transparency as to what audits, FVs, or other security checks have been performed on contract code;
(iii) limited use by knowledge-based tests in lieu of minimum rules of plutocratic net worth.”
Vitalik also proposed that the regulations be compatible with “zero-knowledge proofs”, allowing rules to be enforced without human oversight. He sees ZKP as an innovation that can be applied to improve regulatory practice rather than conflict with it.
“ZKP offers many new opportunities to meet regulatory policy goals and protect privacy at the same time. You should take advantage of this!”
SBF responded to Vitalik’s thread, clarifying that the comments were “pretty reasonable.”
In general, I think these are pretty reasonable!
—SBF (@SBF_FTX) October 30, 2022
Ethereum founders have chosen not to comment on OFAC-sanctioned blocks making up more than 60% of their blocks due to MEV boost relay. This situation is relevant to regulatory issues as it can be argued that Ethereum is now regulated at the protocol level through his OFAC sanctions.
Work is said to be done to mitigate the impact of relays that only process OFAC-compliant blocks. However, the percentage of OFAC-compliant blocks has risen to 65% from just 12% in September. In a series of comments on regulatory issues, one might find it strange that Vitalik completely ignored the ongoing issues with relays. Perhaps he doesn’t want any more light on the issue before a solution is agreed upon.
