Ethereum Is Changing DeFi — And Cutting Out Weak Projects

The Ethereum Foundation is tightening its focus on what it considers “real DeFi,” signaling a shift away from financial apps that rely on centralized control or resemble traditional finance too closely. 

Instead, Ethereum wants to prioritize systems that users can trust without relying on companies, intermediaries, or founders.

Ethereum is Becoming More Decentralized?

Vitalik Buterin said DeFi is a core part of Ethereum’s mission because it gives people direct control over their money. 

“We have a specific vision of what we want to see out of defi: permissionless, open-source, private, security-first global finance,” he wrote on X.

This marks an important change in tone. Ethereum is no longer just supporting DeFi broadly. It is now defining what qualifies as true decentralized finance.

At its core, the shift focuses on removing hidden points of control. Many DeFi platforms still depend on admin keys, multisig wallets, or centralized infrastructure that allows developers to change or pause systems. 

These features help manage risk, but they also create trust dependencies.

Ethereum wants DeFi protocols to pass what Buterin calls the “walkaway test.” This means the system should keep working even if its original developers disappear or lose control. 

In simple terms, users should not depend on any person or company for the system to function.

The Ethereum Foundation is also focusing on privacy, security, and stronger technical standards. Privacy helps protect users from exposing their financial positions. 

Better security reduces hacks. Clearer standards make protocols easier to trust and use.

This shift comes as institutional adoption grows. Banks, asset managers, and fintech firms are increasingly exploring Ethereum-based financial tools. 

However, the Foundation wants to ensure Ethereum’s financial system remains open and decentralized as it grows.

“We want protocols that maximize people’s control over their own assets and minimize centralized chokepoints,” Buterin said.

Ultimately, the network is trying to ensure its financial ecosystem remains independent and user-controlled. 

Instead of simply moving finance onto the blockchain, Ethereum is pushing to rebuild finance so it runs without relying on trusted intermediaries at all.