Ethereum’s true believers think the world’s second-largest blockchain can still be all-encompassing. Others think a more-focused path would be best.

That was the tension on display at Day 1 of the ConsenSys-organized Ethereal Summit NY, a Blockchain Week gathering held at Pioneer Works in Red Hook, Brooklyn on Friday.

“Ethereum’s going to eat everything,” Ameen Soleimani, SpankChain founder and summoner of the MolochDAO, said during one panel.

Earlier in the day, Messari founder Ryan Selkis offered a counterpoint. If ethereum, he argued, truly reinvents finance, that would be plenty.

“If you think about ethereum as programmable money and decentralized finance (DeFi) applications, that’s probably good enough,” Selkis argued.

It reflected an underlying tension at the conference, one where ethereum’s creators and most ardent adherents envision a blockchain that reinvents the web as we know it.

Still, speakers kept coming back to DeFi, which was unquestionably a major recurring theme for the day, given the rise of ethereum lending platform MakerDAO. But it was also clear that the crowd was not ready to give up on ethereum running the decentralized web.

Soleimani’s “ultimate bull case” for the blockchain, for example, was when DeFi reaches the nation-state level.

Soleimani said:

“The announcement that I’m waiting for is the first small nation to announce they are issuing their own currency on ethereum.”

Where to focus

To Selkis’ point, ethereum’s ability to run a new internet hinges on building robust technology that can take much of the pressure off Vitalik Buterin’s still-constrained creation.

“If Layer 2 does not work, ethereum will not work. I believe that with pretty high conviction,” Tushar Jain, co-founder of Multicoin Capital, said from the Ethereal main stage. “There are other Layer 1 chains out there that outperform ethereum on multiple dimensions.”

Kaleido co-founder Sophia Lopez was more circumspect on the question, though. The trouble with the Web3 visions for ethereum, she argued, is that “It doesn’t translate into anything actionable, today.”

She said building toward that long term was still fine, but added, “People need to get excited about what they can do today.”

Brian Flynn of Dapper Labs and the NFTY News newsletter was not circumspect. When asked if ethereum should drop all other applications for DeFi, he gave an immediate head shake.

“I think DeFi is a solution looking for a problem,” Flynn said. “Last year people were all about NFTs and this year they are all about DeFi. It’s just recency bias.”

‘Narrative shift’

ConsenSys Chief Strategy Officer Sam Cassatt gave a talk on-stage arguing that humans now evolve by building better institutions.

He showed a screenshot of a group of people doing a group video chat and said:

“This is a live Maker governace call. It’s equivalent to watching the Fed set interest rate policy.”

In other words, DeFi seems to be what gives the original smart contract chain its strongest bragging rights these days. It’s the value proposition on which its hopes seem to hang.

MakerDAO, the most well known of the DeFi dapps, has been beset by controversy of late. Nevertheless, the MakerDAO smart contract has $346 million in ETH locked up in it, 83 percent of all the ETH locked in the DeFi sector as a whole, according to DeFi Pulse.

If the main use case remains financial, the question for ethereum is whether DeFi is all it needs to be. It’s a narrative question for ethereum’s community, says Long Reads Sunday curator Nathaniel Whittemore, one the community should have seen coming.

“This is an inevitable narrative shift,” Whittemore said, pointing to those who question the DeFi narrative as nothing more than Ponzi schemes on the blockchain versus those who spin it as a revolution.

Whether the question is raised as a defensive counternarrative or a legitimate critique, Whittemore argued that communities like ethereum’s need to be ready to grapple with these big challenges when they arise.

Said Whittemore:

“If you don’t understand the narrative your project is coming into, you’re a ship without a rudder.”

Ethereal Summit NY image by Brady Dale for CoinDesk