Vitalik Buterin: Crypto Must Build Real Value or Face “Doomsday Script” of Pure Speculation

TLDR:

• Ethereum’s gas cap surged from 30 million to 60 million, but meaningful applications remain scarce despite progress. 
• Buterin earned $70,000 on Polymarket by betting against irrational market sentiment in prediction market experiments. 
• Oracle manipulation incident exposed how single Web2 posts can determine million-dollar on-chain settlement outcomes. 
• Ethereum serves as a defense against AI centralization by providing permissionless access for humans and AI agents alike.
  

Vitalik Buterin has returned to Chiang Mai with sharp observations about blockchain technology’s evolution and potential pitfalls.

The Ethereum co-founder shared his concerns about the growing divide between technological advancement and meaningful application development during a recent interview.

He expressed fears that the crypto industry could devolve into pure speculation without building real-world value, warning that this outcome would ultimately lead to the sector’s demise.

Technology Advancement Masks Application Layer Struggles

Ethereum has achieved remarkable technical milestones over the past year, according to Buterin. The network’s gas cap increased from 30 million to 60 million, with ambitious plans to reach 300 million in the coming period.

Zero-knowledge Ethereum Virtual Machine implementations have been successfully deployed, while wallet infrastructure has seen substantial improvements.

Despite these technical victories, Buterin identified troubling patterns at the application layer. “The biggest shift is that I see a huge divide between technology and application,” he stated during the interview.

The community once harbored diverse visions for decentralized autonomous organizations and applications that could reshape social collaboration. Many developers have abandoned these original missions, he noted.

The explosion of memecoins represents this shift, culminating in Donald Trump’s token launches that Buterin views as emblematic of the industry’s current challenges.

Prediction markets emerged as the only notable success story in 2025, yet even this achievement carries limitations. Platforms like Polymarket focus heavily on short-term betting scenarios rather than meaningful long-term applications.

“In theory, prediction markets are successful as a tool, but we need more meaningful applications,” Buterin explained.

He advocates for governance models such as Robin Hanson’s Futarchy, where prediction markets determine policy means while citizens vote on goals. MetaDAO currently explores this approach.

Oracle Vulnerabilities Expose Critical Infrastructure Weaknesses

Buterin revealed he earned $70,000 from a $440,000 investment on Polymarket by betting against irrational market sentiment.

“My approach is simple: I look for markets that are in crazy mode and bet that crazy things won’t happen,” he explained. When market sentiment reaches irrational extremes, contrarian positions typically prove profitable.

However, he highlighted a significant vulnerability in oracle systems that threatens the entire prediction market ecosystem.

A Ukraine battlefield prediction market demonstrated this risk when an Institute for the Study of War employee allegedly manipulated data showing Russian control of a railway station.

This incident transformed a 5% probability event into a certain outcome, potentially triggering improper payouts. Buterin emphasized that current oracle data sources from Web2 platforms “never thought that a message they sent would determine the ownership of $1 million on the chain.”

Two primary solutions exist for oracle problems, according to Buterin. Centralized models rely on trusted entities like Bloomberg for accurate information. Decentralized approaches use token voting, as implemented by UMA protocol.

However, UMA faces declining trust due to game theory flaws where large holders can manipulate voting results. “I always hope that in the future we can find a better solution,” Buterin noted. Chainlink dominates the current DeFi landscape despite its complex and centralized mechanisms.

Ethereum Positioned as Defense Against AI Centralization

Buterin outlined three primary motivations driving his current work. “My biggest fear now is the future: the entire industry will eventually degenerate into a place of 100% speculation, only speculation, no application,” he revealed.

Building better decentralized autonomous organizations and applications across various sectors remains essential to avoiding this fate.

Ethereum serves as a permissionless world computer where humans, companies, and AI agents enjoy equal access rights.

AI can hold assets, conduct transactions, and participate in governance on the platform. “Back to the essence, Ethereum is a decentralized world computer,” Buterin explained.

Potential applications include providing bank accounts for AI agents, enhancing prediction markets, and verifying content authenticity.

Buterin identified the application layer as Ethereum’s biggest overlooked risk rather than technical vulnerabilities. He envisions Ethereum becoming a core hub for decentralized applications across all sectors, not just finance.

The platform must deliver true ownership where users control their assets without corporate intermediaries. “If we have the strongest decentralized technology and only use it to build a bunch of toys or casinos, that’s the biggest risk,” he warned.

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