Vitalik Buterin: Most DeFi is 'fake'

Ethereum founder Vitalik Buterin has criticized the current structure of DeFi, arguing that most of it is fake. In a post on X, he asserted that the true purpose of DeFi is not yield optimization but the decentralization of counterparty risk. Buterin explained that lending and deposit strategies based on USDC fail to meet the core DeFi principles of self-custody and decentralization because they rely on a centralized asset. In contrast, he suggested that overcollateralized algorithmic stablecoins are closer to genuine DeFi as they can distribute risk through market makers.