Buterin’s Ideas For DeFi Will Disrupt Centralized Finance
- The observations are based on his own bad experiences with crypto payments.
- These suggestions can potentially make DeFi accessible to everyone, despite their location or technical expertise.
Founder of Ethereum (ETH), Vitalik Buterin, published key takeaways about crypto payments from his personal experience in a blog titled, “Some personal user experiences.” The article found on Buterin’s website provided some valuable insights for developers and users alike to improve user experience and reliability of decentralized finance (DeFi).
Quoting his anecdotes from over a span of a decade, Buterin analyzes the challenges he faced in the cryptocurrency payment space and the probable solutions he finds to it. He begins by pointing out that “[the] Internet is not 100% reliable,” a problem he encountered while trying to pay a merchant with his mobile internet.
Eventually, Buterin had to complete the transaction over WiFi that was available 50 meters away. As a solution, he suggests, “We need in-person payment systems to have some functionality [such as] NFC or a QR code.” He believes that this is the best way to get a transaction broadcasted and will allow customers to transfer data directly to the merchant.
Next, Buterin explains that simple-and-robust UIs (user interfaces) are better than fancy-and-sleek ones. This observation comes from the difficulty he faced with default transactions, gas limits, and phone wallet glitches while paying a merchant. He suggests, “We need to have better defaults.”
Another suggestion Buterin offers is, “UX around transaction inclusion needs to be improved.” He comes up with this observation while facing issues with the max-base fee tolerance and the confusion in tracking stuck transactions in the UI. At this juncture, he credits the Brave Wallet team for taking his suggestions on increasing max-base fee tolerance from 12.5% to 33% and exploring ways to project stuck transactions.
“Secret-sharing-based off-chain social recovery is just really fragile and a bad idea,” says Buterin. While using Shamir’s secret sharing app, which employs the split-up of private keys into five shards instead of smart contracts, Buterin lost a small amount of BTC and ETH.
Buterin asserts that having an app only for recovery makes one forget about it over time, instead, “The way to add guardians should be to provide their ETH address, and recovery should be done by smart contracts, using ERC-4337 account abstraction wallets.”
Citing an incident where he accidentally created a public link between his withdrawal and deposit addresses, Buterin emphasized the importance of privacy to wallet developers. He adds, “We need better forms of account abstraction to remove the need for centralized or even federated relays, and commoditize the relaying role.” He concludes by pointing out that more still needs to be done in the crypto payment space.