Vitalik Buterin Unveils Ethereum Foundations Strategic Shift and Future Directions

In an interview on the Epicenter podcast, Ethereum co-founder Vitalik Buterin discussed the shift in strategy for the Ethereum Foundation (EF), the future of Layer 2 (L2) solutions, and the unexpected outcomes of his donations in meme coins.

Buterin indicated that EF is altering its approach. Previously, the organization aimed to represent and coordinate the entire ecosystem, but now it plans to focus on tasks that only the Ethereum Foundation can address.

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Buterin revealed that the Ethereum Foundation intends to take a more active role in developing practical solutions. He asserted that this is a more constructive way to achieve goals than merely critiquing existing products.

He acknowledged that the growth rate of ETH in recent years has lagged behind that of Bitcoin and Solana. Nevertheless, he noted that identifying the reasons for this trend is not straightforward. In his view, the influence of the Layer 1 network is crucial—without it, Ethereum risks losing its relevance.

He supported the idea of raising the minimum fee for data transfer on L2 networks, but opposed percentage-based “taxes” as they are easily circumvented.

Buterin believes that L2 networks have taken on the “soul-crushing” competition of high-frequency trading and speed races. This allows Ethereum’s “first layer” to focus on decentralization, security, and resistance to censorship. He added that the main value of second-layer solutions is shifting towards independent sequencing, a function they are moving away from.

Buterin recounted a notable donation made in meme coins. After receiving a substantial amount of Shiba Inu tokens, he was concerned about their rapid devaluation and quickly distributed the assets among several charities.

To his surprise, the price of the «humorous coin» did not drop but rebounded. As a result, the funds managed to generate hundreds of millions of dollars, which were directed towards the development of open-source biotechnology, including systems to combat pandemics like improved testing and air filtration.

Vitalik Buterin highlighted quantum computers as a real threat to cryptographic systems. He warned that breaking resilient encryption could become a possibility as early as the period from 2030 to 2035.

Despite this, he expressed optimism regarding Ethereum’s ability to adapt. He noted that there is already significant work underway in the ecosystem on quantum-resistant technologies, such as those based on zero-knowledge proofs (ZK proofs).

As a reminder, in June, Buterin introduced a digital «pluralistic» identification system aimed at enhancing privacy protection.