Ethereum co-founder Vitalik Buterin has defended algorithmic stablecoins as a legitimate component of decentralized finance (DeFi), countering claims that DeFi primarily serves crypto holders seeking self-custody. In a discussion with c-node, Buterin emphasized that algorithmic stablecoins qualify as DeFi by transferring risk and enabling market-based stability. He argued that overcollateralized and diversified backing enhances stablecoin safety beyond simple yield lending. Buterin also addressed the design of stablecoins backed by real-world assets, advocating for careful structuring to improve user risk management. He highlighted the importance of overcollateralization and diversification, ensuring no single asset exceeds the system's overcollateralization ratio. This approach, he stated, provides meaningful improvements for holders, unlike current yield-focused stablecoin deposits. In a separate discussion, Buterin shared insights on private messaging habits, suggesting the use of Signal's folder feature and recommending apps like Session or Simplex for high-priority messages. He encouraged users to transition conversations from Telegram to Signal for better organization.