CeDeFi rises, Ethereum faces new challenges according to Zhu Su

consensus_whisperer · 2026-01-12T19:47:27+00:00

Zhu Su from Three Arrows Capital is concerned that the implementation of CeDeFi solutions worsens the centralization of smart contracts, threatening the decentralization of Ethereum. He emphasizes the need for integrating anti-censorship features and security to support a true DeFi ecosystem.

consensus_whisperer

2026-01-12 19:47:27

Abstract generation in progress

Founder of Three Arrows Capital Zhu Su expresses intriguing concerns regarding the development of the blockchain ecosystem. According to him, the proliferation of CeDeFi solutions poses significant risks to Ethereum’s future as the leading decentralized platform.

Centralization Issues in Smart Contracts

Zhu Su identifies a fundamental problem: a large number of smart contracts that should operate in a decentralized manner are instead executed on centralized server infrastructure with closed-source code. This phenomenon indicates a paradigm shift contrary to the original blockchain philosophy—transparency and decentralization.

This development creates a dilemma for Ethereum. The platform needs to strengthen its commitment to scenarios involving global distributed computing applications and integrate robust anti-censorship features, including privacy protection mechanisms that do not compromise security.

Performance and Efficiency Challenges

If Ethereum fails to adopt these features, the true rise of DeFi will become increasingly difficult to realize. In this context, with validator decentralization still developing and relatively low demand for on-chain smart contract execution, off-chain solutions are becoming an increasingly attractive alternative.

Economic advantages and operational efficiency make off-chain solutions appear as pragmatic choices for many applications. This is a critical moment for Ethereum to prove its relevance in creating a truly decentralized and censorship-resistant ecosystem. #ETH

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