According to Decrypt, Ethereum co-founder Vitalik Buterin has stated that the original vision of Web3 as a more open internet stack has 'faded somewhat into the background.' In a blog post, Buterin identified rising transaction fees as the 'number one culprit' for the shift away from Web3's ideals. He argued that ENS is the only non-financial application being used at scale, while an 'ideological rift' has opened between the crypto world and non-blockchain advocates of decentralization, who now see crypto as a 'distraction.'
Buterin also claimed that 'few talk about consumer crypto payments,' and that where people do use crypto to transact or save money, 'they often do this through centralized means' such as exchange accounts or trading the stablecoin USDT on Tron. Rising transaction fees have, according to Buterin, excluded all but 'degen gamblers' from using blockchains, as they are 'the only audience that remains willing to pay' when transaction fees soar. When that niche community of degens dominates a blockchain's user base, he said, 'this adjusts the public perception and the crypto space's internal culture,' leading to negative outcomes.
However, Buterin also pointed to positive developments over the past year, including scaling solutions such as rollups, the ERC-4337 account abstraction standard, and light clients on Ethereum. He highlighted privacy solutions such as Railway and Nocturne, and devoted a large portion of the essay to zero-knowledge proofs, a 'very powerful new tool' used to prove that something is known without directly exposing the known information. Buterin emphasized the importance of Ethereum's 'social layer,' which 'vigorously enforces its values in those places where pure incentives can't.' He believes that integrating 'degen gamblers' into the ideals of Web3 and decentralization can be achieved through a mix of incentives, community, and 'hard norms of neutrality, open source, and censorship resistance.'
