Finance

Vitalik Buterin: Ethereum DeFi Maturation Rivals Banks, But Can It Outpace the Risks?

Vitalik Buterin says Ethereum DeFi matures, rivaling banks, with improved security, and advocates for decentralization.

November 13, 2025, 2:33 PM

Close-up portrait of Vitalik Buterin, founder of Ethereum, looking intently at the camera.

A focused close-up portrait of Vitalik Buterin, the founder of the groundbreaking Ethereum project. By Alexey Smyshlyaev / Shutterstock.com.

Executive Summary

Ethereum co-founder Vitalik Buterin stated that DeFi on Ethereum has matured to rival traditional banking services, envisioning its use as a primary bank account due to advancements in security, maturity, and usability.

The Ethereum DeFi ecosystem now processes over $1.9 trillion quarterly with 312 million active users, offering average savings yields of 8.2%, significantly higher than traditional banks’ 2.1%.

Buterin and the Ethereum Foundation published “The Trustless Manifesto,” advocating for “low-risk DeFi” and warning against compromising decentralization for convenience, emphasizing core principles like open-source code and censorship resistance.

The Story So Far

Ethereum co-founder Vitalik Buterin’s optimistic assessment of decentralized finance (DeFi) reflects its significant maturation in security and usability, transitioning from high-risk speculation to a viable alternative for on-chain savings. This evolution is underscored by the ecosystem’s robust growth, processing trillions in transactions with higher average savings yields than traditional banks, and is guided by foundational principles like decentralization and open-source code, as emphasized in “The Trustless Manifesto” and the network’s increasing adoption by major financial institutions for tokenized assets.

Why This Matters

Vitalik Buterin’s assertion that Ethereum’s DeFi has matured to rival traditional banking for savings, offering significantly higher yields and enhanced security, signals a pivotal shift in the financial landscape. This evolution, coupled with a renewed emphasis on decentralization and trustless design, positions Ethereum to attract a wider user base seeking stable on-chain financial services, potentially transforming mainstream financial practices and asset management.

Who Thinks What?

Ethereum co-founder Vitalik Buterin believes that decentralized finance (DeFi) on Ethereum has matured considerably in security, stability, and usability, making on-chain savings viable and competitive with traditional banking services, potentially serving as a primary bank account for users globally.

The article highlights that while Ethereum’s DeFi ecosystem processes vast transactions, boasts a significant market, and offers higher savings yields than traditional banks, it still faces ongoing risks, including security breaches, fraud, and hacks.

Ethereum co-founder Vitalik Buterin recently stated that decentralized finance (DeFi) on Ethereum has matured to a point where on-chain savings are not only viable but are beginning to rival traditional banking services. Speaking in a pre-recorded address at a Dromos Labs event, Buterin expressed encouragement over the advancements in security, maturity, and usability within Ethereum’s DeFi ecosystem, envisioning its use as a primary bank account for various users globally.

DeFi’s Evolution Towards Stability

Buterin’s remarks highlight a significant shift in the DeFi sector, moving away from its early association with high-risk lending and speculative strategies towards greater stability. He noted a “night and day” difference between DeFi in 2025 and its nascent stages in 2019 or 2020, despite acknowledging recent security breaches like the multi-million-dollar Balancer hack.

He emphasized that smart contract security has substantially improved. Buterin advocated for the “walkaway test,” a measure ensuring users can always independently recover their funds, and urged developers to uphold Ethereum’s core principles of open-source code, interoperability, and censorship resistance.

The Ethereum DeFi ecosystem now processes over $1.9 trillion in transactions quarterly, boasting a $77 billion market and more than 312 million active users as of mid-2025. Average DeFi savings yields currently hover around 8.2%, significantly higher than the approximately 2.1% offered by traditional banks, despite ongoing risks such as $1.1 billion in fraud and hacks reported in the first half of 2025.

The Trustless Manifesto and Decentralization

Buterin’s optimism aligns with his earlier advocacy for “low-risk DeFi” as a sustainable economic backbone for Ethereum, comparable to how Google Search supports Google’s ecosystem. This week, Buterin and the Ethereum Foundation published “The Trustless Manifesto,” a document warning against compromising decentralization for convenience.

The manifesto criticized trends like centralized sequencers in Layer 2s and hosted RPC nodes, arguing that “decentralization is not destroyed by capture, but by convenience.” It proposed three fundamental laws for trustless design: no critical secrets, no irreplaceable intermediaries, and no unverifiable results.

Strengthening Ethereum’s Foundations

Beyond DeFi, Ethereum continues to strengthen its technical and institutional infrastructure. The network hosts over 75% of tokenized real-world assets and 58% of the global supply, with major firms like BlackRock, Securitize, and Ondo Finance deploying tokenized Treasury products on-chain.

Its Layer 2 networks collectively secure more than $50 billion in value, while efforts in privacy and scaling have accelerated through the Ethereum Foundation’s new 47-member Privacy Cluster. Buterin also noted improvements in scalability on both Layer 1 and Layer 2, citing tools like Lighter, which has achieved over 10,000 transactions per second.