Ethereum Is Moving to 'Real DeFi,' Vitalik Buterin Says - But What Does It Mean?

Ethereum co-founder Vitalik Buterin has stated the network is moving toward what he describes as 'real DeFi.' The term signals a shift from early-stage decentralized finance experiments to more robust and scalable financial protocols on the Ethereum network according to Buterin. Buterin has also sold 17,000 ETH in the past month, with the proceeds earmarked for privacy-preserving technologies and open-source projects as reported. This comes as Ethereum's broader ecosystem witnesses growing DeFi integration and institutional participation.

The Ethereum Foundation (EF) has taken a significant step by deploying 2,016 ETH across new validators, with plans to stake up to 70,000 ETH in total. This initiative aligns with the EF's goal of generating yield from its treasury while supporting network security and decentralization. Rewards from staking will directly fund the Foundation's operations and research into Ethereum's future development.

The EF has also launched a new DeFi coordination team to assist builders and developers in advancing Ethereum's decentralized finance infrastructure. The move reflects a strategic focus on fostering long-term innovation in the space.

Why Did This Happen?

The Ethereum Foundation's decision to stake its own ETH is a response to growing concerns over the concentration of Ethereum's validator set and client ecosystem. By deploying open-source tools like Dirk and Vouch, the EF is modeling best practices for secure, non-custodial staking. The Foundation is also emphasizing the use of minority clients and distributed infrastructure to avoid centralized failure points.

In parallel, companies like EMCD are expanding their DeFi offerings. EMCD has launched a staking service for Ethereum and Solana, targeting both retail and institutional investors. The product offers dynamic APYs of up to 3.5% for Ethereum and 7% for Solana, with rewards compounding every 48 hours. This aligns with EMCD's broader goal of becoming a full-scale Web3 ecosystem player.

How Did Markets React?

Ethereum's price has been under bearish pressure, currently trading below key moving averages. The RSI is near 30, and the MACD line remains below the zero line, signaling continued selling pressure. Immediate support is seen around $1,741, and a break below that level could expose lower levels near $1,600.

Meanwhile, the DeFi market continues to grow, with Hong Kong identifying it as a key opportunity for fintech expansion. According to government-backed research, the DeFi market expanded from $6 billion in 2021 to $80 billion in 2023. However, the sector still faces challenges related to governance and compliance as noted.

What Are Analysts Watching Next?

Analysts are closely monitoring Ethereum's staking dynamics and how they impact the network's security and decentralization. The validator entry queue has now reached 3.6 million ETH, and the total staked ETH supply is at a record 37.1 million according to market analysis. The Ethereum Foundation's move to stake its own ETH is expected to influence institutional behavior and set new staking benchmarks.

Security remains a top concern for DeFi platforms. Step Finance, a Solana-based DeFi platform, has shut down operations after a $27 million hack in January. The incident drained its treasury and made further financial recovery unfeasible. Step Finance is now implementing a buyback plan for token holders but remains financially insolvent.

Hong Kong's government-backed reports also highlight the potential of the metaverse and DeFi in the broader fintech landscape. While some institutions remain cautious, others are actively pursuing metaverse-related developments.

Vitalik Buterin's ongoing efforts to fund privacy-preserving technologies and open-source projects are also attracting attention. His sales of ETH via the CoW Protocol aim to support a wide range of initiatives, including secure software systems and hardware tools as reported.

The Ethereum Foundation's new DeFi coordination team is expected to play a critical role in supporting developers and builders. This initiative aligns with the EF's broader mission to reduce reliance on ETH sales and promote a sustainable, decentralized financial ecosystem.