5 Reasons Low-Risk DeFi Won’t Turn Ethereum Into Google

Key Points

• Vitalik claims Low-Risk DeFi could be Ethereum’s growth engine
• Critics say it lacks volume to support Ethereum’s $0.5T valuation
• ETH faces growing competition from stablecoins and RWAs
• Ethereum’s neutrality offers unique but limited long-term value

Ethereum co-founder Vitalik Buterin has sparked a major debate by claiming that Low-Risk DeFi protocols, like Aave and MakerDAO, could play a central role in Ethereum’s future, much like Google Search did for Google.

Low-risk defi can be for Ethereum what search was for Googlehttps://t.co/6xIxCrOToQ

— vitalik.eth (@VitalikButerin) September 20, 2025

Vitalik believes these protocols could serve as safe, scalable financial primitives, supporting savings, payments, and lending in a simple and reliable way.

Importantly, low-risk defi is often very synergistic with a lot of the more experimental applications that we in ethereum are excited about. pic.twitter.com/VnmRVSw09N

— vitalik.eth (@VitalikButerin) September 21, 2025

These kinds of services, he argues, would preserve Ethereum’s cultural roots and provide real-world utility to underbanked populations across the globe.

In his words, “Low-Risk DeFi is often very synergistic with the more experimental applications we’re excited about in Ethereum.”

Low-risk DeFi is Ethereum’s workhorse: simple, powerful, and universally useful. One day, Aave could be distributing yield to billions across the globe. https://t.co/tQrR2Um1Fn

— Stani.eth (@StaniKulechov) September 20, 2025

This statement resonated with some developers. Aave founder Stani Kulechov envisions a future where billions receive yield from Low-Risk DeFi platforms, transforming the way the world interacts with money.

“Low-Risk DeFi is Ethereum’s workhorse: simple, powerful, and universally useful,” Stani said.

From Vitalik’s perspective, Low-Risk DeFi could help Ethereum scale while offering inclusive, non-volatile services that anyone can use, whether in developed countries or emerging markets. But while the vision is ambitious, not everyone is convinced.

In contrast, some crypto airdrop opportunities have gained attention recently for delivering more immediate value to users, suggesting alternative paths to ecosystem growth.

Why Low-Risk DeFi Can’t Sustain Ethereum’s Valuation

The biggest criticism of Vitalik’s idea? Low-Risk DeFi just doesn’t generate enough economic activity to justify Ethereum’s massive $0.5 trillion market cap.

Let’s look at the numbers:

• In September, total trading volume across top Low-Risk DeFi protocols was only $36 million

• DeFi’s Total Value Locked (TVL) sits at around $95.2 billion

• Stablecoin supply within Ethereum has grown to $161.3 billion

Despite these large figures, Low-Risk DeFi protocols like Aave and MakerDAO consume very little blockspace. That means fewer transactions, fewer fees, and significantly lower revenue for Ethereum validators.

And without sustained fee generation, Ethereum’s long-term value proposition becomes harder to defend.

Ethereum advocate David Hoffman agrees that locking ETH in Low-Risk DeFi protocols may elevate ETH’s role as “commodity money,” but he also admits it doesn’t generate strong demand for the network itself.

Another point of concern is that ETH’s role as the native monetary asset is weakening. Stablecoins, like USDC, and Real World Assets (RWAs) are becoming dominant in DeFi transactions.

This means users can now skip ETH altogether, relying on more stable or yield-generating tokens instead.

“Low-Risk DeFi can only serve as Ethereum’s ‘Google Search’ if ETH is the default monetary asset. But with stablecoins and RWAs growing, that’s no longer a given,” one analyst posted on X.

Ethereum revenue and DeFi TVL. Source: AJC on X – Techtoken

If Low-Risk DeFi relies on assets other than ETH, Ethereum could lose its monetary dominance, even on its own chain.

Meanwhile, other sectors like Bitcoin Cash have seen explosive short-term gains, drawing attention away from Ethereum’s slow-moving DeFi narrative.

Ethereum’s Real Edge Lies in Neutrality, Not Low-Risk DeFi

While some critics believe Vitalik is overestimating the power of Low-Risk DeFi, others acknowledge a separate strength in Ethereum: neutrality.

Ethereum is a censorship-resistant platform, and that makes it appealing as a custody layer for centralized assets. For example, storing USDC on Aave via Ethereum might offer more security and resistance to third-party intervention than using it on centralized enterprise chains.

This neutral infrastructure makes Ethereum valuable in ways outside pure transaction volume. It can serve as the trust layer for global finance—even when using centralized stablecoins or tokenized RWAs.

Just Nationalize the DeFi protocols!

But in all seriousness, this is a step in the right direction although Ethereum mainnet is not in a position to offer scalable and cheap low-risk DeFi right now (maybe in the future).

Enshrined services is the real endgame (one step beyond… https://t.co/43gXL6oE46 pic.twitter.com/uXck8F15f6

— David (@EffortCapital) September 21, 2025

Some experts believe the long-term goal should be building “enshrined services”, protocol-level DeFi tools that are built into Ethereum itself. These would go beyond just lending and borrowing, creating a more seamless and secure financial stack for billions.

But even this doesn’t solve the underlying issue: Low-Risk DeFi still needs massive scaling, better UX, and more revenue. Ethereum’s Layer-1 is still expensive and slow compared to fee-optimized chains like Solana, or centralized payment processors like Stripe.

The push to serve the unbanked using on-chain lending markets also faces technical limitations. Moving all core financial services to Layer-1 Ethereum can reduce usability and composability, further weakening Vitalik’s ideal scenario.

At the same time, prediction markets are evolving. For instance, Kalshi overtook Polymarket recently, showcasing how Web3 applications outside traditional DeFi are also gaining traction, offering fresh angles on blockchain use cases.

Even market dynamics play a role here. Recent whale movements following the Fed’s signals have shown how macro trends can influence Ethereum’s price more than the performance of DeFi protocols themselves.

To stay updated on such developments, the broader community can follow the latest updates via this dedicated crypto news section.