Guest: Vitalik Buterin, Co-founder of Ethereum

Hosts: Ryan Sean Adams; David Hoffman

Air Date: August 11, 2025

Summary of key points

Ethereum celebrates its tenth anniversary. In this conversation, founder Vitalik Buterin reviewed Ethereum's development over the past decade and looked forward to its future. He shared the surprises and challenges he encountered during Ethereum's growth, such as the events surrounding The DAO and NFTs, and offered some different choices he might make if he were starting over.

In this conversation, we delved into the evolution of Ethereum culture, the importance of privacy as a core value, and the trade-offs between L1 and L2. Additionally, Vitalik shared his vision for how Ethereum will develop in an AI-dominated future.

Summary of highlights

One of Ethereum's greatest contributions is its role in promoting openness and decentralization, making these concepts a habitual way of thinking for many people. These values need to be continuously inherited and updated with each generation.

If I could go back in time, I would tell young Vitalik everything we know about zero-knowledge proofs (ZK-SNARKs) in advance.

Ethereum should be an inclusive and diverse ecosystem that accommodates many different people and perspectives.

The concept of Ethereum as a “world ledger” is more concrete and better conveys the core value of Ethereum.

The emergence of NFT was also a huge surprise. I did not anticipate the emergence of NFT at all.

If we compare the ledger (Ethereum) to a book, then ETH is like the "ink" that writes on it. The ink can represent the functionality of L2. If the ink is marked with a TM (trademark symbol), it means it is a branded L2; if there is no TM symbol, it is an unbranded L2.

Each project has a responsibility to create the best possible version of the philosophy that its members are most passionate about and comfortable with. Hopefully, the end result is that we can create something that benefits the world, rather than projects getting into a fight with each other or devolving into a state of just shouting slogans.

Privacy is a key concern we must all have. Privacy is freedom and an important right that we all should protect. Everyone in the Ethereum ecosystem should support the concept of privacy.

We shouldn’t have “privacy wallets”; privacy should be a feature of all wallets, and privacy features should be able to be seamlessly integrated into existing wallets.

The proliferation of a centralized data collection system is fragile because if these databases are hacked, data that was originally thought to contribute to national security may actually lead to instability in national security.

Ethereum's role can be divided into two parts. First, it provides a tool that protects people's freedom, autonomy, and organizational capabilities, independent of any individual, company, or nation-state. Second, it fosters a global community. Ethereum has attracted a community of people who care about decentralized finance, innovative organizational forms, privacy protection, and democratic governance, and the Ethereum community itself remains irreplaceable.

The challenges of 2024 will be, on the one hand, the pressure on the ecosystem from the falling ETH price; on the other hand, many once-hot projects and topics are gradually coming to an end, while new alternatives have yet to successfully take over. The future direction must be to find new projects that can both bring tangible benefits to the community and gain widespread support.

L1 should have moderately low latency to meet the needs of ordinary users; for scenarios requiring extremely low latency, such as high-frequency trading, L2 is a better choice. We need to find a way for L1 and L2 to work together to achieve balanced development of the entire ecosystem.

The greatest value of Ethereum lies in its openness. It is like a sandbox, allowing people to experiment and innovate in different directions.

“I believe that participants in the Ethereum ecosystem, including those engaged in financial activities, are responsible and will not take risks easily. ETH derivatives are a fundamental form of financial stability, so I support the existence of these treasury companies.”

Blockchain technology can promote a fairer and more transparent world.

The First Two Years of Ethereum

David: Ethereum just celebrated its tenth anniversary. First of all, happy birthday! The Ethereum whitepaper was first published in 2013, and the mainnet officially launched in July 2015. Ten years later, Vitalik, how do you think Ethereum's development compares to the original vision?

Vitalik: I can say that the development of Ethereum has far exceeded my expectations, which is the most important thing. But at the same time, this process has also been much longer than I expected.

When I wrote the white paper, I planned to start it as a side project, finishing it in a few months before returning to university. Of course, that didn't happen. Later, we envisioned Ethereum going through four phases, culminating in the transition to Proof of Stake. We assumed the foundation's funding would run out, and the project would naturally transition into autonomous development. But that didn't happen.

Furthermore, the rise of decentralized finance (DeFi) and the launch of various tokens are all application scenarios I mentioned in my white paper. Although the terminology people ultimately used differed from my original description, these phenomena have materialized as expected, such as the creation of the Ethereum Name Service (ENS) and stablecoins. At the same time, I have also discovered many surprising things.

Ethereum's main contributions

David: Ethereum has come a long way in the past decade. Looking back, we see that many things have largely been achieved according to the original plan. If you read the Ethereum white paper and look at Ethereum today, you'll see that it has indeed fulfilled many of its original visions. Looking back on this history, what unique contributions do you think Ethereum has made to the world? Which ones make you most proud or satisfied?

Vitalik: I believe one of Ethereum's greatest contributions is its significant role in promoting openness and decentralization, making these concepts a common way of thinking for many people. These values need to be continuously passed down and updated with each generation. Much like the free and open source software that emerged in the 1980s and 1990s, the blockchain world has largely inherited these values and continued them into the 2010s and 2020s of the 21st century. Ethereum has indeed achieved remarkable results in this regard, turning many ideas that were once only theoretical into reality.

For example, prediction markets are a prime example. In the early 2010s, prediction markets were a theoretical concept, primarily a market mechanism for analyzing event outcomes. Ethereum provided an important experimental platform, enabling this concept to move from concept to reality.

Another example is the DAO (Decentralized Autonomous Organization). While this field has experienced many ups and downs, Ethereum has made blockchain-based governance structures more flexible and operational. I'm very proud of this achievement, and I believe we'll continue to see progress in these areas for decades to come. Ethereum's contributions aren't limited to a single area; they have broadly impacted many different areas, from technology to societal ideals.

The biggest surprise

Ryan: You mentioned some surprises along the way. I imagine there have been a lot of surprising things along the way. It's interesting that you originally envisioned Ethereum as a side project, but it's become a massive, full-time endeavor that's been going on for over a decade.

So, what major events in the development of Ethereum have surprised you?

VB: The first was the DAO (Decentralized Autonomous Organization) getting such a huge amount of Ethereum support and then almost immediately collapsing. Looking back, the fact that the DAO got so much funding was more surprising to me than the fact that it collapsed, but both events were impressive.

Ryan: It was like a runaway use case, and it could be seen as an example of early decentralized finance (DeFi) because it was closely tied to capital formation. I remember like 5% of the Ethereum supply was sucked into the DAO, which was a huge number.

Vitalik: It actually reached 11%. The total supply of Ethereum at the time was 11 million. If it were a lighter version, it might have reached 17%. But in any case, it was a very high percentage, a first in Ethereum's history.

Then there's the birth of Ethereum Classic (ETC) . The controversy surrounding the hard fork was a real battle. I find this period of history almost as dramatic as a TV series. Immediately after the ETC controversy, the Shanghai DDoS attack unfolded, seemingly orchestrated by a screenwriter. These events presented numerous technical challenges, which were truly fascinating.

The emergence of NFTs was also a huge surprise . I hadn't anticipated their creation at all. The growth of decentralized finance (DeFi) also surprised me. In 2019, DeFi was still very small, with only Uniswap barely existing. But just a year and a half later, DeFi experienced explosive growth. Furthermore, the implementation of Proof of Stake (PoS) took much longer than I expected, which is also something worth reflecting on.

Of course, there have been some positive surprises. For example, the development of zero-knowledge proof (zk) technology has been five times faster than I expected, which is very gratifying . Furthermore, the level of interest in blockchain technology from institutions and governments has exceeded my expectations. Even in the 2010s, many large companies and governments showed strong interest in this field. While that interest was more for the purpose of demonstrating innovative capabilities, it was still something I had not anticipated. Now, institutional interest has returned, but this time in a more concrete and practical form. There are also many other things that have surprised me.

Things that take more time than expected

Ryan: Vitalik, one of the core issues you mentioned was that many things were taking longer than you initially anticipated, particularly when you released the Ethereum whitepaper. Why did these things take longer? When you say "took longer," are you referring to aspects like implementing Proof of Stake (PoS) and implementing the Rollup roadmap? Which specific areas took longer than you initially anticipated, and why?

Vitalik: I think one of the main reasons was the complexity of software development. I was inexperienced at the time and didn't fully understand the difficulty. Another reason was that we continually set the bar higher during development . The version of Ethereum we originally planned to launch within a few months was essentially just a Layer 2 solution based on Prime Coin. However, as we saw increasing interest in January, we realized that Ethereum was a project with so much anticipation that it deserved a more serious investment. Therefore, we decided to truly build a Layer 1 suitable for building Layer 2 solutions.

At the time, there weren't many L1s truly suitable for building Layer 2. Overall, these two factors combined not only prolonged the time it took to develop the technology, but also pushed us to continuously raise our standards.

Overcoming challenges

David: You mentioned many significant challenges throughout Ethereum's development, often unforeseen ones, such as the DAO hard fork and the Shanghai attack. However, even moments of success, such as the 2021 NFT craze, have been accompanied by new challenges. The Ethereum project has navigated these complex dilemmas.

I'd like to ask you about how Ethereum specifically developed its strategy for addressing these challenges. How has this strategy evolved within Ethereum's culture, community, foundation, and core developers? Having accumulated nearly a decade of experience, how would you describe Ethereum's unique approach to addressing unpredictable challenges?

Vitalik: I think the way we approach problems at the ecosystem level is very effective. We're always trying many different approaches to solve a problem. For example, there are solutions based on the blockchain's foundational layer (L1) as well as those developing directly at the application layer. Within each category, there are often multiple competing approaches working simultaneously. This approach allows us to advance work in multiple directions simultaneously and create synergies between different efforts. In particular, when it comes to maturing zero-knowledge proof technology, many different approaches have worked together.

Furthermore, I think the collaborative style of the Ethereum ecosystem is impressive. While it’s not perfect, overall it works very well.

Lessons for young Vitalik

David: If you had the opportunity to go back in time and teach a young Vitalik or the newly formed Ethereum Foundation something to help them better develop Ethereum, where would you choose to go back to? What would you teach them?

Vitalik: An obvious answer would be to go back to the very beginning of Ethereum and tell them everything we know about Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge (ZK-SNARKs). This technology is disruptive in many ways and is an incredibly powerful tool.

David: Is it to make Ethereum’s zero-knowledge technology ten years ahead?

Vitalik: Exactly. I think we've taken a lot of detours or unnecessary side roads in the development of the technology. If we knew ahead of time what the end goal was, we could save a lot of resources and make progress much faster. So, not knowing what the future holds is a real unfortunate limitation in the development of Ethereum.

People often ask me what message I would give my past self if I had the chance. Most of the time, my answer is simply to remind myself to stay on the right track technically. But I also wonder if there are other messages worth sharing beyond just technical skills, like reminding myself to be more realistic about timelines.

Sometimes I wonder if there could have been better strategies, socially or economically, that would have seemed more ideal in retrospect. For example, in the early days of Ethereum (2014), could a temporary mechanism have been introduced to allocate a portion of the token supply to projects supporting public goods? Even if it could only be implemented in a crude way, such as through miner voting (based on the past 1024 blocks) to determine the distribution of developer rewards? This mechanism could have avoided an explicit premine, while providing more ample funding for the foundation and other organizations, and perhaps even earned Ethereum more credibility in its early days.

I also often wonder if Ethereum could have established a closer relationship with the Bitcoin community in its early days. I think it's a shame that Ethereum didn't attract more support from the Bitcoin community.

Here's a bold hypothesis: If Ethereum had adopted the formula I've described for token issuance, had it been a fork of Bitcoin and had announced a transition to Proof of Stake from day one, even if the initial mechanisms were imperfect, perhaps Ethereum could have become part of Bitcoin's "big block" camp. Bitcoin's big block camp refers to the community that supports increasing block size to improve transaction processing capacity. If Ethereum had chosen to side with this camp, perhaps the entire development process would have been smoother.

Of course, any choice will have unintended consequences. If you move forward with an existing community from the start, you might face constraints from many stakeholders, which can limit what you can do. So, these are questions worth pondering.

Bitcoin vs Ethereum

Ryan: I feel like Bitcoin's philosophy has gradually evolved into a near-religious belief. This makes me wonder whether any forked coin is destined to split the community, or even lead to its collapse. However, it's been over a decade now, and Bitcoin has been around for about 16 years, so we've all grown up together. You could say Ethereum is in a period of rapid growth, while Bitcoin is like a young person just learning to act independently.

Do you think the relationship between Bitcoin and Ethereum has improved, or is it simply a shift in price? It feels like when Bitcoin's price was underperforming, the Bitcoin community seemed more friendly toward the Ethereum community. They seem to be quieter now, but that might change when the price trend shifts. However, I think there's less hostility between the new generation of Bitcoin and Ethereum communities. How would you describe this relationship?

Vitalik: It depends on what you mean by "new generation," because I think there are different types of "new generations." Some focus on technology, like researching the virtual machine (VM), Taproot (a privacy and efficiency upgrade for Bitcoin), OP_CAT (scripting opcodes that extend Bitcoin's functionality), and so on. And then there's another group, like "Michael Saylor followers," who I think will probably never be particularly friendly or share particularly aligned values with Ethereum.

On a technical level, I think smart people in the tech world have given Ethereum a lot of praise for its technological advancements and privacy efforts. Furthermore, these efforts aren't just theoretical; they've yielded real results. I also think some in the Bitcoin community are actually trying to push the boundaries of technology through OP_CAT and new Bitcoin layer-two solutions like the Lightning Network. These efforts are very interesting. Therefore, from a technical perspective, the relationship between Bitcoin and Ethereum is indeed more positive.

David: When you see people building technology on top of Bitcoin, such as trying to enhance the functionality of Bitcoin's virtual machine or make Bitcoin more expressive, do you think, "You're wasting your time, just come develop on Ethereum! We created Ethereum for these purposes." Or do you view their attempts with curiosity and optimism?

BUTA: I think it’s a bit of both.

Ethereum’s Cultural Evolution

David: I want to talk about the current phase of Ethereum. Recently, with the election of Donald Trump, we've observed a shift in societal trends that has impacted not only the crypto space but also broader social culture. In some ways, this trend reflects a shift away from the feminine, World Economic Forum (WEF) style of the project toward a more traditional "Bronze Age mentality." To quote one Twitter user, this seems to be a cultural trend of "out with the woke, in with the base." This cultural zeitgeist has also permeated the crypto space, with many projects emphasizing their American identity. For example, the controversial Solana marketing video explicitly stated that their goal was to focus on technological innovation rather than on gender issues.

(TechFlow Note: The "WEF style" here refers to the values ​​promoted by the World Economic Forum, which are often associated with concepts such as globalization, inclusiveness, and diversity, and may be considered "feminine" by some. The "TechFlow mentality" is a metaphor that refers to more traditional and primitive values ​​that emphasize strength, infrastructure construction, and traditional culture.)

It's worth noting, however, that Ethereum doesn't seem to be participating in this cultural shift. What are your thoughts? Whatever Ethereum was like before this cultural shift, it remains that way today. Is this a deliberate choice? Should Ethereum be a bulwark against the tides of change?

Vitalik: I believe Ethereum should be an inclusive and diverse ecosystem that accommodates many different people and perspectives . But at the same time, in a world with many different cryptocurrencies and ecosystems, different cultural tendencies will naturally choose one over the other. Even if Ethereum were the only cryptocurrency, I think the cultural differences between it and other projects would still exist.

I think every project has a responsibility to create the best possible version of the philosophy that its members are most passionate about and comfortable with. Hopefully, the end result is that we can create something that benefits the world, rather than projects becoming entangled in battles or devolving into a situation where it's just a sloganeering exercise . You'll see one group shouting one slogan, another group shouting another, feeling incredibly righteous, but months later realizing they haven't made any progress.

So, personally, I do worry about the serious cultural shift we're seeing. But if you just worry, you'll ultimately become part of it. So the real question is how do we move forward, respond, and create a better competitive alternative?

In this regard, one of the new themes that emerged this year was my attempt to rekindle the discussion about DAO public goods funding. I think these topics are incredibly important. If we abandon public goods funding, or any form of governance other than founder dictatorship, there could be many negative consequences, and the ultimate outcome could be a return to a state of reliance on the founder's personal authority.

At the same time, quadratic funding does present issues, and token voting-based DAOs also face numerous challenges. Therefore, I've been supporting prediction market-based funds and prediction market DAOs. I've collaborated with Divonch, who has done extensive work in the public goods funding space. Version 2 is directly based on prediction markets, essentially combining prediction markets with a jury mechanism. The idea is to use prediction markets to assess the value of something at scale, while incorporating a jury mechanism to ensure high quality.

My basic philosophy is to try to replicate the best aspects of the free market in the area of public goods financing, creating an open participation system that allows anyone to join and, if they do well, get a fair chance, rather than turning it into a purely social game.

Another important thing I've been pushing for is a stronger focus on privacy, which has been a core part of the cypherpunk ethos from the beginning. If you remember "Chaum and E-Cash" from 1982, E-Cash wasn't decentralized. All transactions went through a centralized operator, but it was private and protected user privacy. Due to technical limitations, we moved on to Bitcoin, which is decentralized but lacks privacy. However, now with ZK-SNARKs, these technical limitations have disappeared, and we can actually achieve both decentralization and privacy.

So I think privacy is something we have to focus on. Privacy is a freedom, an important right that we all should protect. We need to build privacy into our technology. If we make privacy a priority, then the game we're in is about action, not just talk.

I think everyone in the Ethereum ecosystem should support the concept of privacy. We must continue to push this direction.

Privacy on Ethereum

Ryan: Let's dig deeper into this, because I think privacy is an interesting and important part of Ethereum's culture, and it's about balancing the core values of Ethereum with mainstream adoption. You mentioned Milady, and it seems to embody a kind of "Bronze Age popularity"—Bronze Age imagery on the front end, and effective policies and real work on the back end. So, how do we achieve "Bronze Age popularity" for privacy on Ethereum?

In some areas, we've made tremendous progress in cryptography, such as the amazing Zero-Knowledge (ZK) technology. However, practical applications of privacy, such as Tornado Cash, still face many challenges. In particular, Roman Storm's trial is still ongoing, and we still don't know the final verdict. Whenever financial privacy is involved, the state often intervenes.

I have always believed that if Ethereum or Bitcoin had implemented privacy from the beginning, with all transactions being private, we might not have achieved the widespread adoption we have today. This is because some forces might try to stifle the technology before it matures.

So, how do we strike a balance between ensuring privacy can develop to a reasonable level without sparking a regulatory backlash? Currently, privacy applications like Tornado Cash and Railgun remain niche, with limited user experience and privacy not being the default option. While projects like Aztec are launching, they are independent rollups. How can we strike a balance between satisfying user needs and ensuring national acceptance of this progress? What is a realistic roadmap for privacy?

Vitalik: I think there are two parts to this question. The first part is how to move privacy from a niche feature to a default part of the user experience, and the second part is how to make governments and regulators happy with that.

Regarding the first question, I haven't supported implementing privacy directly on Layer 1, not because I think it's fundamentally wrong, but because I believe the technology isn't mature enough yet. We don't yet know which privacy technology is optimal. Implementing a particular technology on Layer 1 could lead to some very suboptimal results. This is a challenge for any EIP, but it's particularly acute with privacy, as the very nature of private data makes it sensitive. You can't arbitrarily replace certain parts of the tree structure, which makes upgrades more difficult.

David: Does this mean that you think implementing privacy on Ethereum Layer 1 is fundamentally the right direction?

Vitalik: In the long term, I'm open to this. One thing is future compatibility, and another is security. We have to remember that if privacy tools on Layer 1 fail, the consequences could be extremely serious, like someone being able to steal tokens indefinitely without detection. I believe that as the technology matures, we'll eventually achieve this goal.

I mentioned in a recent blog post that the number of bugs in code is actually trending downward. We will eventually reach a stage where we have a high level of trust in code, something security researchers would consider unimaginable 20 years ago. I believe that advances in artificial intelligence will accelerate this process. But until then, projects like Zcash have taken courageous steps, but even then, they still face an extremely high technical bar.

The question is, can we make privacy as default as possible without building it directly into Layer 1? For me, the medium-term goal is to make privacy features in wallets the default. Currently, a major mistake in the ecosystem is creating the concept of "privacy wallets." In reality, there shouldn't be "privacy wallets"; privacy should be a feature of all wallets. Privacy features should be able to be seamlessly integrated into existing wallets.

Ryan: So, if I have an existing crypto wallet browser extension and I have the option to send a transaction normally or send a private transaction, is that a good default setting?

Vitalik: Exactly. You should have a private balance and a private send button, and that should be part of Metamask or other wallets. There's been some work on that within the Ethereum Foundation, and hopefully we'll see some progress in the next few months.

Privacy that resists state interference

Ryan: Regarding the other part about privacy technology, how do we gain state acceptance? Clearly, projects like Ethereum want to promote privacy, open source, and decentralization. However, these ideals can conflict with some governments and cultures. We want to use technology to advance social and cultural progress, but we also want these technologies to be adopted by the mainstream, rather than being banned globally. Is there a balance that addresses state concerns about crime and money laundering while still upholding the core values of cypherpunks? Or are the two inherently incompatible?

Vitalik: First, I think the concept of privacy pools has made significant progress. For example, protocols like Railgun are now operational, and we've seen some successful cases where they've effectively prevented funds stolen from large DeFi contracts from being transferred to privacy pools. This demonstrates that the technology behind privacy pools is becoming increasingly mature and has stood the test of time.

Currently, the majority of illicit funds flowing through privacy protocols originate from thefts within DeFi protocols or from personal accounts. In these cases, privacy protocols can effectively restrict the flow of these funds through blacklisting mechanisms. If your funds are stolen, you can flag them as suspicious through the API; similar measures can be taken if a DeFi project is hacked. Therefore, this mechanism has become a key factor in driving the development of privacy technology.

Of course, we must also recognize that the existing blockchain ecosystem isn't completely secure against malicious actors. Various malicious actors still have numerous ways to transfer funds and conceal their identities, avoiding tracking. However, compared to traditional financial systems, transparent public blockchains at least provide a degree of traceability. If your funds are compromised, you can track their movements through the blockchain. I believe that privacy technology can achieve a balance between increasing resistance to malicious actors and providing greater privacy protection for ordinary users.

On the other hand, we need to actively advocate for the importance of privacy technology from a law enforcement perspective. For example, there have been several recent cases where telecommunications company surveillance data has been leaked through hacking attacks. This data was collected and provided to the government under the Communications Assistance for Law Enforcement Act. However, its disclosure could pose a threat to national security because it could be exploited by other countries or organizations. Similar incidents are occurring frequently around the world.

The proliferation of centralized data collection systems is fragile because if these databases are hacked, data that was supposedly beneficial to national security could actually destabilize it. I believe this is an argument that needs stronger support. Two lawmakers have told the public that actively reducing data collection is actually a safer approach. This is the direction we should be moving in, and privacy-preserving finance is part of that.

Cypherpunk vs. mainstream culture

Ryan: I sense you want to maintain a firm stance on privacy in cryptocurrencies and Ethereum. This is actually related to a broader cultural issue. Over the past decade, we've seen the cypherpunk ideals tried but never fully realized. Now, Ethereum is at a historic moment, gradually gaining mainstream acceptance. For example, companies like Robinhood are starting to build Layer 2, JPMorgan is discussing on-chain businesses, and Coinbase is also growing. These traditional financial institutions and mainstream culture are flocking to the Ethereum space.

However, this also brings some challenges. How will those who do not share the values of the cypherpunks affect Ethereum? You mentioned the diversity of Ethereum. We do welcome more people to join, but these people may not value the core values we care about. So, how should we draw the line? For example, a stablecoin project like Rye may be more in line with the ideals of the cypherpunks, but it has not been successful. On the contrary, stablecoins like Circle and Tether, although lacking in idealism, have achieved practical results in helping people in emerging countries. So, how do we balance adhering to the values of the cypherpunks with adapting to the needs of reality? When should we prioritize the market fit and actual use of the product?

Vitalik: I believe there are several areas where privacy and cypherpunk values need to be prioritized. First and foremost is the underlying protocol. A decentralized backend can support centralized or decentralized applications, but if the backend is centralized, only centralized applications can be built. If the blockchain itself doesn't support privacy or intermediary-free interactions, it won't be able to accommodate privacy-friendly applications.

For example, I've been pushing for Account Abstraction and improvements to EIP 7770 because without this, many Smart Wallet use cases, such as multi-signatures, quantum-resistant features, and privacy protocols, may be forced to rely on an ecosystem of intermediaries. The limitation of intermediary ecosystems is that they have limited effectiveness, and when problems arise, they cause problems for users. Therefore, we must ensure that interactions with Ethereum are at least privacy-friendly and do not rely on centralized intermediaries to complete basic operations.

Secondly, we need to ensure that Ethereum's privacy and disintermediation are implemented in a way that's at least feasible. This involves work not only at the protocol level, but also at the wallet and application levels. While most people might not choose this approach, we can't afford to lack the necessary infrastructure or allow top-level protocols and standards to become hostile to this approach.

An analogy is email. In theory, email is an open protocol, allowing anyone to host their own mail server. However, in practice, spam issues often lead large service providers to blacklist these servers. Therefore, email relies heavily on centralized authority rather than openness. We need to consider how to better protect email's openness.

Similarly, for new Ethereum standards, we need to ensure that privacy-friendly intermediary operations are feasible, while supporting self-sovereignty and avoiding unnecessary performance penalties. It doesn't matter if not everyone chooses this approach. Even if many people still choose to hold their coins on Coinbase, that's fine. The key is that this option must exist, and the protocol and standards must be designed with these needs in mind.

David: Before we delve into specific topics about Ethereum, I'd like to ask a broader question to provide context for the discussion. There are some foreseeable trends in the future, such as AI, that will shape the future. We can discuss different possibilities, such as increased geopolitical tensions and a fragmented world, while also discussing exciting developments like gene editing. Vitalik, what role do you envision Ethereum playing in these future trends?

Vitalik: I’m glad we agree on gene editing and AI. Ethereum’s role can be divided into two parts.

First, it provides a tool that protects people's freedom, autonomy, and ability to organize—a tool that's independent of any one individual, company, or nation-state. This capability is particularly crucial in an increasingly fragmented world. Fifteen years ago, many people were willing to trust Facebook, but today, we almost unanimously agree that only blockchain is trustworthy. Therefore, the market for trust in technology is now ripe. There are many willing to pay for these technologies, and many who care about social problems and want them to be part of the solution. This lays a crucial foundation for the technology's development.

The second component is building a global community. Ethereum has attracted a group of people who care about decentralized finance, innovative organizational forms, privacy protection, and democratic governance. This powerful intellectual appeal makes Ethereum a unique community asset. Even in a hypothetical future, if a solution to an NP problem were discovered tomorrow, rendering all blockchains inoperable, the Ethereum community itself would still hold irreplaceable value.

World Ledger

Ryan: In the early days of Ethereum, people often referred to it as a "world computer." However, that concept has gradually waned in popularity. Earlier this year, you wrote in an article that Ethereum is a "world ledger," which I think is a more accurate and concrete term. While it may still seem a bit abstract to some, to me it implies that Ethereum can serve as a global tool for recording important information such as property.

I've been pondering the question: What exactly is Ethereum? I tend to think of it as a decentralized property rights system. While this definition might be a bit difficult for the average person to grasp, do you think the "world ledger" accurately captures Ethereum's core mission?

Vitalik: I think "world ledger" is a more accurate description. Compared to "world computer, " the concept of "ledger" is more specific and better conveys the core value of Ethereum. The term "world computer" is too broad. Computers can perform many functions, such as generating cat pictures, translating text, and even making videos, but these functions are not suitable for Ethereum scenarios, especially on L1.

The term "ledger" focuses more on economic value. It encompasses not only financial applications like DeFi, but also other areas, such as ENS (Ethereum Name Service). Therefore, when I describe Ethereum's Layer 1 as a global ledger, it not only clarifies its positioning but also more clearly illustrates the relationship between Layer 1 and Layer 2. This statement aims to make it easier for people to understand Ethereum's role. If everyone accepts this definition, then this positioning is a success.

David: If Ethereum is the world's ledger, then what is ETH?

Vitalik: That's an interesting question. If we compare the ledger to a book, then ETH is like the "ink" that writes on it. We can extend this metaphor further: the ink can represent the function of L2. If the ink is marked with a TM (trademark symbol), it means it is a branded L2; if there is no TM symbol, it is an unbranded L2. This metaphor may help us better understand the role of ETH.

Ethereum Outlook in 2024

David: I think your point makes a lot of sense. Next, I'd like to discuss the current state of the Ethereum community in 2024. Personally, I believe 2024 will be a difficult period for Ethereum. The persistently low price of ETH has not only impacted the entire ecosystem but also led to some divisions within the community. What are your thoughts? Do you believe 2024 will indeed be a difficult period for Ethereum? How would you explain this? If you were to tell the story of Ethereum in 2024, how would you describe it?

Vitalik: I think the continued low price of ETH is indeed one of the core reasons for many of the problems . Another important factor for many in the community is that some of the hot topics and projects in the past have gradually lost popularity, while new alternatives have not yet emerged . For example, some people had high hopes for the DAO, but when its development stagnated, they felt confused and didn't know what to focus on next.

Furthermore, the NFT market gradually cooled in 2024, while memes experienced explosive growth that year. However, the rise of memes appears to have primarily occurred on Solana, not Ethereum. The Ethereum community's core values are promoting freedom and openness, but the popularity of memes has not significantly contributed to these goals, which has puzzled many.

Another significant challenge is the relationship between L1 and L2. Some in the community believe that there are issues with the collaboration between L1 and L2, particularly regarding incentive mechanisms. The divisions within the community became even more pronounced when people realized that their interests might not align.

The year 2024 is the result of a confluence of factors. On the one hand, the falling price of ETH has put pressure on the ecosystem; on the other hand, many once-hot projects and topics are gradually reaching their end, and new alternatives have yet to successfully take over. I believe that the future direction must be new projects that can both bring tangible benefits to the community and gain widespread support. In fact, I think by 2025, we've already begun to see some positive changes, perhaps these problems are gradually being resolved. This is one of the reasons why we feel more hopeful now.

Changes at the Ethereum Foundation

David: Currently, the Ethereum community is still discussing various issues surrounding 2024. Some of these issues may simply be narrative PSI operations, while others represent real challenges that need to be addressed. One core topic is that Ethereum's "Rolling Center Roadmap" appears to have deviated from its original vision. Chain fragmentation is severe, with each chain and each L2 layer acting like an independent system, while L1 itself lacks any real attempt at scaling. This roadmap seems inconsistent with Ethereum's goal of serving as a unified global computer.

At the same time, the Ethereum Foundation also underwent adjustments. Can you explain why these changes occurred? What areas of the Foundation needed to improve? What is the current status of the Ethereum Foundation?

Vitalik: I think these changes have actually been brewing for a long time, but they just need some triggers to drive them to happen.

The leadership changes at the Ethereum Foundation are a prime example. For example, Aya now serves as Chair of the Board, a role she appears more comfortable in while still actively participating in specific projects, such as promoting Ethereum adoption in Bhutan. She has also shown a keen interest in Russell and issues related to financial inclusion, devoting more time to them. These changes demonstrate that the Executive Director position is not suited to being held by the same individual for an extended period.

My tenure was relatively long, so the leadership changes included adjustments to my role. Additionally, the Foundation introduced some new voices and new focuses, such as Tom and Shelley, who each have expertise in technology.

At the same time, the Foundation has welcomed many new leaders across its departments and projects. For example, work related to scaling and user experience is being reorganized. One area I'm currently focusing on is how to better organize matters related to censorship resistance and privacy. This means we're moving from theoretical exploration to the implementation of privacy technologies in real-world production environments. Many new and interesting projects have already been launched. I believe these changes would have occurred naturally at some point, but a few key events have accelerated the process.

Regarding the L1 and L2 issues, I don't think this is directly related to the Foundation's adjustments. Obviously, increasing the L1 gas limit is an important issue for the Foundation, and we are also working hard to improve interoperability between L2s.

In reality, this work began in mid-2024, but progress has accelerated due to events in early 2025. Improvements to L2 interoperability continue to progress, and many L2s have already completed their Phase 1 goals. Next, we're focusing on reducing withdrawal times. Our current goal is to reduce withdrawal times from one hour to a few minutes, possibly even 12 seconds. This depends on how much gas users are willing to pay. If withdrawal times are too long, such as an hour or even a week, native deposits and withdrawals will become very inefficient.

Therefore, trustless L1-based asset issuance may not prevail in the long term, and bridges that rely on custom minting and burning, which may ultimately centralize power under multi-signature control, will be more competitive. For L1-based approaches to be competitive, we must significantly reduce withdrawal times.

If withdrawal times can be reduced to one hour, liquidity will become cheaper, even free in some cases. If we can reduce it to 12 seconds, we might see more users depositing and withdrawing assets through L1. These improvements require the collaborative efforts of the entire ecosystem, including internal teams within the foundation, L2 projects, and technical development teams like zkEVM. Overall, this is a complex, multi-party collaborative process that will take time and resources to implement.

I'm optimistic about progress in addressing these issues. We need both a strong L1 and an L2 system that's clearly tied to the L1. While all the technical steps will take time to complete, overall, we're heading in the right direction.

Economic cooperation

Ryan: I still have some concerns about the rollup roadmap. While there have been some successes in deploying rollup technology, such as RobinHood’s recent rollout, I worry that we haven’t paid enough attention to the different stages of user property rights on Ethereum L2.

Phase 1 has made some progress, and I believe Phase 2 will also proceed smoothly. However, insufficient attention has been paid to coordination between the L1 and L2 layers. While some issues with user experience and standards can be addressed through tactical adjustments, I'm more concerned about the overall lack of coordination. If we enter a situation like the one you mentioned in 2021, assuming Ethereum is decentralized and L1 is also decentralized, but there is a possibility of a large rollup chain with all execution state centralized, I worry about whether L2 will become more powerful than L1, dictating the rules and potentially even breaking away from Ethereum. This situation seems to lack a good economic balance. The relationships between different chains and brands are not as close as they were in the past with Ethereum's L1. How do you view this issue of economic coordination? Do you think we can resolve it, or will it take a long time?

Vitalik: I agree with you. I think the problem of economic collaboration can be viewed from two perspectives. One is the issue of L2 fees. Currently, the base fees for L2 are relatively low, and I think raising them appropriately could improve many issues. However, I'm not sure fees are the most critical variable. I believe network effects are a more important factor.

Another important concern is withdrawal time. If all assets are issued on L2 and users transfer assets through a minting and burning bridge, L1 participation will be greatly reduced. Maintaining the core position of L1 is very important; even if most activity occurs on L2, assets should still be issued on L1. This is not only more secure from a trust perspective, but also solves the governance and upgrade issues of L2. If assets are issued on L2, users must trust that L2 regardless of how they transfer assets. However, if assets are issued on L1, users can rely on the final decision-making power of L1 through native withdrawal functions. This model provides greater security while allowing users to move more freely from one L2 to another, thereby promoting the development of applications across multiple L2s.

Therefore, encouraging the issuance of assets on L1 and making it economically viable is crucial to maintaining L1's core status . I believe we should strive to achieve this goal.

Raising base fees to a reasonable level would also help. At the same time, we should continue exploring ways to achieve synchronous composable blocks, such as enabling L2 to interact with L1 in real time. This model would allow L2's value to derive more from its collaboration with L1, rather than simply being a standalone chain connected via a bridge.

Extended L1

Ryan: David and I are primarily focused on Ethereum's social layer. We believe that in order to achieve significant impact in a subtle manner while simultaneously enhancing the soft power of Ethereum's L1, we need a more robust L1. This isn't just about increasing transactions per second (TPS), but also about making L1 the core of decentralized finance (DeFi), a hub for liquidity, and the primary platform for asset minting. The stronger L1 is, the more effectively it can attract and guide L2, providing them with liquidity support, which is why they are so closely tied to Ethereum. We are very excited about initiatives to improve L1 performance.

There seems to be a new trend in recent discussions, especially under the new leadership of the Ethereum Foundation (EF), with improving L1 performance becoming a top priority. Can you share your perspective on why improving L1 performance is so important?

Vitalik: The key question has always been how to scale Layer 1 while maintaining security. Security means not destabilizing the network, not completely centralizing node operations, and not disrupting the staking ecosystem. I think the technology we have now, like Zero-Knowledge Virtual Machines (ZKVMs), was completely non-existent a few years ago. This year, it's almost production-ready, whereas a year ago, it was still impossible. So, a lot of people are actively pushing this technology forward.

We plan to increase the block gas limit by a factor of 3-5. If this causes the bottom 10% of individual stakers to be eliminated due to lack of resources, we won't ignore these stakers. Instead, we hope to encourage them to leverage ZKVM to validate the chain instead of manually re-executing everything. This approach is safe, as even 10% of the network's nodes relying on ZKVM is acceptable, as long as that percentage remains below one-third.

As ZK technology matures, we can begin to strategically apply it in different areas. This can be seen as the process of L1 entering the first stage. As the security of the technology further improves, L1 will enter a state equivalent to the second stage.

There are also other technologies that can help improve L1 performance. For example, historical storage has long occupied a significant amount of node space. We recently implemented a basic historical data cleanup mechanism, deleting pre-merge historical data, reducing the storage requirements of each Ethereum node by several hundred GB. In the future, we plan to further optimize this, ultimately implementing historical data cleanup after each network upgrade, with the long-term goal of expiring data after 36 days. To achieve this, we need a peer-to-peer distributed storage network to ensure full accessibility and verifiability of the chain.

Another technology worth noting is gas repricing. The Block Access Operating System (BAO) is also a key innovation. It allows every node (except the node that creates a block) to execute blocks with maximum parallelism. The node that creates a block must execute it sequentially, but the hints it generates allow other nodes to verify and re-execute the block in parallel. This mechanism enables Ethereum to operate securely at a higher gas throughput.

So now we have a lot of technology choices, and they're well optimized, and we have more tools than ever before to find the right balance between scalability and security.

Ryan: Do you think combining these technologies can help us achieve Don Krad's goal of increasing Ethereum's transaction volume from the current 20 transactions per second to 10,000 transactions per second within the next three to five years while maintaining Ethereum's decentralization? Do you think this goal is realistic?

Vitalik: I've become less confident about some of the high-end targets, but I think the problem is more about ultra-short block times than ultra-high TPS. If I had to choose, I'd say 10,000 transactions per second with a 12-second block time is safer than 1-second block time. Because at these extremes, we run into very fundamental decentralization issues like the speed of light. So I personally think it's important to be cautious about the high-end targets, but I do think there's a lot of room for improvement.

From a decentralization perspective, I think we're in a difficult position to judge, but I actually expect decentralization to improve in many important ways . Let me give you an example of what I mean. For example, people often quietly complain about not having many people actually running nodes, relying on RPC services instead. I think we finally have a very solid roadmap to move away from that. Part of that, of course, is Helios—the ability to run light clients in wallets, and its efficiency continues to improve.

Another important factor is that cypherpunks often value the privacy of their own node operations. This was something I hadn't realized until I spent time interacting with some of them. Running a personal node provides strong privacy protections. For example, if you use Ethereum's privacy protocol and perform different operations through multiple accounts, and you're very concerned about protecting your privacy, but you still query the balance of each address through Infura, then Infura will know all your connections. Running your own node completely avoids this problem because you only need to download the blockchain data, and all queries are performed locally, so no one can know what you read.

The question, then, is how can we achieve both? The answer is that we can soon. There are two paths to this goal. The first is to start from the current concept of Ethereum nodes and make them more efficient. Specifically, this efficiency can be achieved through an aggressive historical data expiration policy and by not storing all data. In fact, you don't even need to store branches of the state tree; you only need to store a state table, which only takes up 80 GB.

If you have block-level access lists, and you use zero-knowledge proofs (like zkVMs) to verify the correctness of block-level access lists, then you can keep the Ethereum state updated with almost no local computation, just maintaining an 80GB local database. 80GB of storage is very small; it's equivalent to the size of 3-4 different LLM models. Almost everyone has 80GB of storage on their device these days; my phone has 80GB, for example.

But if we scale L1 moderately conservatively, say by a factor of 30, then 80 GB will obviously become 2.4 TB. 2.4 TB of storage would put us back on track to running a full node today. In effect, we've already given ourselves 30 times the headroom for expansion. But if we want to scale even further, we could adopt the concept of partial-state nodes, storing only the state related to the top 100 applications, along with all EOA and smart contract data. This approach would significantly reduce storage requirements.

Another approach is to start with browser wallets and add more safeguards. The first part is Helios, a light client that can verify the chain. The second part is using short-term technologies such as TEEs and Oram. In the long term, PIR (Private Information Retrieval) can be used. It has cryptographically reliable trust properties and allows requests to be sent to a server without the server knowing the content of the request. The server will respond to the request, but it will be completely unaware of the response. By standardizing this technology, you can actually achieve strong privacy guarantees.

For example, you can have light clients that provide not only the same security properties as a full node, but also the same privacy properties as a full node without actually running a full node. Basically, we have several different paths to providing users with decentralized properties that were not even possible back in 2017.

Even in these early stages, before L1 starts to scale significantly, I think we're achieving greater scale, greater decentralization, stronger privacy, and improved censorship resistance in many areas. At the same time, there are some areas that I'm concerned about, such as the continued decentralization of Proof of Stake and blockchain construction, which needs to be focused on. I think having a diverse group of high-quality research teams focusing on different areas and approaches will be very valuable in this regard.

Overall, I think we’re actually making very good progress towards increasing decentralization and scale simultaneously, and we just need to keep working on it.

Ethereum's Barbell Strategy

David: "If Ethereum, as a Layer 1, directly participates in high-frequency trading (HFT), it would fundamentally undermine Ethereum's core value, as excessive pursuit of HFT would lead Ethereum away from its original purpose." I don't quite understand this conclusion. Can you explain why participating in HFT would undermine the core value of Layer 1? How does Ethereum's Layer 1 scaling strategy address this issue?

Vitalik: The core reason is that if we over-optimize one aspect, such as low latency in high-frequency trading, we sacrifice other key attributes, ultimately leading to an imbalance in the entire ecosystem. This is similar to the discussion in the field of AI safety: when certain technologies are pursued without limits, they may bring unexpected negative consequences.

In high-frequency trading, low latency is paramount. To achieve even lower latency, ecosystem participants are incentivized to continuously optimize their technology and setup, with no natural stopping point. Ultimately, this trend could lead to the gradual abandonment of Ethereum's global decentralization. For example, if the block time is set to 1 second, block propagation and confirmation times must each be under 500 milliseconds. This forces the network to make extreme optimizations in peer-to-peer communication and creates a strong "co-location incentive."

The so-called "co-location incentive" means that participants place their servers as close as possible to the block proposer's server to reduce latency. This can significantly improve transaction speed and competitiveness. For example, as a participant in decentralized finance (DeFi), you want to send transactions as quickly as possible to obtain the latest market information. As a developer, every 5 millisecond reduction in latency can potentially allow you to send 1% more transactions per block, thereby generating greater revenue.

The reality of high-frequency trading systems is that all participants compete to centralize servers in pursuit of the lowest latency. Therefore, I believe Ethereum's dual strategy makes sense: L2 handles tasks requiring centralization, such as high-frequency trading, while L1 focuses on providing security and censorship resistance. In this way, L2 isolates L1 from the co-location incentives and mitigates the risks of excessive centralization.

L2's independent ordering mechanism is one of its strengths. This is why my interest in the base layer has recently waned, while my focus on L2 has increased. L2 leverages the efficiency benefits of centralization while maintaining decentralized governance—a highly effective balance. Therefore, L2 is well-suited to meet the needs of high-frequency trading .

Looking further ahead, AI will be able to think 1,000 times faster than humans. From an AI perspective, the subjective speed of light is only 300 kilometers per second. With the advent of AI, the concept of a global financial ledger may no longer be feasible. What's needed is a city ledger, and L2 is a natural choice for this.

If L1 starts moving in this direction, many centralized incentives will accumulate. If we commit to competing in the high-frequency trading space, it means we will need to optimize to the extreme in an environment where others do not value decentralization.

Therefore, I believe a dual strategy is the right approach. L1 does need improvement, especially in terms of block times. Bitcoin's 10-minute block time is clearly too long. If Bitcoin's block time were set to 20 seconds instead of 10 minutes, I believe this would significantly change its trajectory.

L1 should have moderately low latency to meet the needs of ordinary users; however, for scenarios requiring extremely low latency, such as high-frequency trading, L2 is a better choice. We need to find a way for L1 and L2 to work together to achieve balanced development of the entire ecosystem.

Ethereum Nationalism

David: In your answer, I heard a point I hear often: the downstream of the product. A blog post you and Ryan frequently reference on the podcast discusses "open" and "focused" ecosystems. For example, Bitcoin is a focused ecosystem, building its culture around its 21 million hard cap. Solana, on the other hand, focuses on low latency and high-frequency trading, which have become its core values.

In contrast, Ethereum leans more towards an open ecosystem, attempting to keep all possible options open and pursue a balanced middle path. However, I really like what you said: "Everything should be done in moderation, including moderation." According to this logic, Ethereum should maintain balance in many aspects, but also focus on certain key areas.

My partner Ryan advocates for cultural pride in Ethereum, which he calls "Ethereum nationalism." How would you define this cultural pride? In what ways should Ethereum's culture and values be more prominent?

Vitalik: That's a very interesting question. The discussion you mentioned about Ethereum as a nation is also intriguing. First, I think an important point is that the world is far more complex than a single, simple choice. Ethereum's success is largely due to its multi-layered structure. This structure allows us to achieve the best of both worlds in different areas.

I can illustrate this point with the analogy of a nation. Some argue that a nation run by a dictator may be more efficient because, without the need to consult with others, they can quickly push through large-scale projects and improve society. Of course, I don't support dictatorship, as its disadvantages far outweigh its advantages. However, it's worth noting that dictatorship does exhibit efficiency advantages in certain areas. Democratic capitalism can be seen as a framework that incorporates the advantages of dictators while avoiding their disadvantages. In this framework, the "dictator" can be an entrepreneur who controls a large amount of resources and creates results through efficient resource allocation.

However, this model needs to be strictly maintained. If entrepreneurs deviate from the framework and set their own incentive mechanisms, this balance will be broken and the disadvantages of dictatorship may emerge.

This analogy also applies to Ethereum's L1 and L2. L2 designs are generally more centralized than Ethereum's L1, while also offering a more conventional user experience. Ethereum's L1, on the other hand, prioritizes cypherpunk values like decentralization and censorship resistance.

If designed properly, we can build mechanisms on L1 to constrain L2. For example, a proof system can ensure that L2 doesn't falsely claim certain information to be true, thereby protecting user funds. Furthermore, there are mechanisms to bypass channels; if L2 begins to censor a user, the user can force the transaction to be included in a block and recover their funds.

These bypass mechanisms are already being used in real-world applications, which is quite interesting. Another example is that if a centralized sorter performs poorly, we can replace it through on-chain tools. Users can vote on whether to replace the sorter, ensuring the fairness and efficiency of the system.

This brings us to one of Ethereum's core strengths: it's an ecosystem with a diverse set of actors. Ethereum's task is to design the right incentive mechanisms to maintain a balance between these actors. A strong L1 is a crucial component of these mechanisms, as it prevents entrepreneurs from straying from the framework.

If the system proves to be effective in theory but cannot support all users exiting at the same time in practice, the entire system will collapse. Therefore, the role of L1 is to establish these frameworks and find a balance between scalability and decentralization, allowing users to choose freely.

I think the greatest value of Ethereum lies in its openness. It is like a sandbox that allows people to experiment and innovate in different directions.

ETH Treasury

Ryan: We can continue this discussion. We often compare Ethereum to a country, and we can extend this analogy to assets. Every country has its own currency, and some even hold the world's reserve asset. We could call this the social aspect of Ethereum, and part of the cultural pride of Ethereum is using ETH as the glue that connects the entire ecosystem. Let's explore a few related concepts.

First, I'd like to ask about your thoughts on the emerging ETH treasury companies. For example, Tom Lee mentioned on his podcast that he hopes to acquire 5% of the ETH supply. To do so would obviously drive up the market price. What do you think of these institutions? Do you consider them a good thing, a bad thing, or insignificant?

Vitalik: Regarding this question, I believe that the core value of ETH lies in its role as the foundation of the entire Ethereum ecosystem and a universally recognized key asset . Therefore, maintaining the strong role of ETH is crucial. If different Ethereum organizations, such as Bankless and the Ethereum Foundation, have completely misaligned incentives and little overlap, then Ethereum as a unified community could be at risk of collapse. This is why we need to protect the role of ETH and ensure it remains at the core of the entire ecosystem.

I have many theories about the source of ETH's value. Sometimes, I feel like none of them fully explain ETH's price movements. It seems as if the price of ETH is dictated by some mysterious force, like the fourteen demons living on Jupiter, and market rhetoric simply attempts to cater to the preferences of these forces.

Nevertheless, from a more practical perspective, building a central ecosystem related to global economic and financial applications is still the right direction. Therefore, transaction fees, network effects, etc. are all important factors supporting the value of ETH.

As for these treasury companies, I'm a bit confused about how they operate. They don't use their own funds directly, but rather raise capital by issuing shares and then use this capital to purchase ETH. In a sense, they create a leveraged financial product based on ETH, somewhere between an auction and a derivative. This model has clearly attracted a lot of participation and has gained market acceptance.

David: Which one do you like best?

Vitalik: My favorite ETH treasury company? Probably the US government, because they have accumulated a lot of ETH by confiscating hacker funds, which is quite interesting.

Ryan: Let me defend these ETH treasury companies. To some extent, these companies provide a new coordination mechanism for ETH, helping to spread the value story of ETH. This mechanism, similar to the path of Bitcoin's success, extends ETH's influence into mainstream finance. While there may be risks of over-leverage, these activities are currently improving the health of the Ethereum ecosystem. As traditional finance increases its interest in ETH, capital inflows will also increase. This not only improves the security of the community but also provides resources for the development of more cypherpunk innovations.

From what we can see so far, the treasury's activity of holding 0% to 1% of the ETH supply seems to be having a positive effect, which is why I believe the ETH Treasury is beneficial.

Vitalik: I agree with you. I think that social coordination mechanisms around Ethereum, such as those that are part of a company treasury, are a great addition . This allows people to participate in the Ethereum ecosystem in different ways depending on their financial situation and needs. So, these treasury companies do provide a very valuable service.

Of course, if you tell me three years later that these treasury companies caused the decline of ETH, my guess is that they may have become a