Today, X posted a long article titled "What happened to Ethereum?" Like a boulder hitting a calm surface, it sparked discussions among many senior practitioners. Some supported it, while others were secretly sad. Whose opinion makes sense? Let's take a look.
The author of the long article is fangjun ( @fjun99 ). It is too long, so we have excerpted some core points.
Ethereum seems to be actively building, and the new upgrade plan includes many innovations (but nothing as exciting as Blink), and Ethereum also has many powerful Layer 2s. However, it is true that Ethereum's Gas is already at 1 Gwei. What is wrong with Ethereum?
Ethereum is fine as a whole. It is the most powerful smart contract platform, the most decentralized, and the most prosperous ecosystem, whether it is EVM applications or second-layer chains. There is no problem with the technical route. The roadmap updated by Vitalik on the last day of 2023 is still valid, guiding the development of Ethereum in the next three to five years.
Is the problem with Ethereum a lack of memes? I don’t think so. Solana’s celebrity meme craze makes it a bit like Las Vegas. Ethereum has always been like Wall Street, and it’s not a reasonable choice to turn Wall Street’s buildings into Las Vegas.
The problem with Ethereum is that, first of all, it has been solving technical problems, but what are these technical problems for? For example, Vitalik's discussion today, the final settlement speed is of course important. Your vision should be to create a usable product, like Apple and Microsoft.
The problem with Ethereum is, as @eawosikaa has been saying lately, lack of marketing. In my opinion, it's not lack of marketing, it's lack of basic vision and positioning. None of the following questions have answers: Vision: What is Ethereum? What product does Ethereum provide? What is the next product of Ethereum?
Will the rise of ETH and the approval of ETFs solve Ethereum's problems? No. Ethereum had a major "speculation" in the last round, when a large number of NFTs were issued. Does it seem a bit ridiculous now? Why did so many of them emerge at once? Of course, there were also excellent non-NFTs at that time, such as Vault 4626 and AA 4337.
Ethereum L2 is currently in a very unhealthy state. We can certainly say that a hundred flowers bloom, but let’s look at it from another perspective. “V God is the Emperor Xian of Web3”, and Cao Cao used the emperor to control the princes. (Note: Ethereum is being led by the ecosystem?)
Some people say that Ethereum’s low gas consumption is because all transactions are run on L2, and the transaction volume of L2 is huge. But at present, as an ecosystem, isn’t the problem of Ethereum the high fragmentation of assets? It was already very serious when there were not many L2s in the last round. Isn’t the high fragmentation of assets the core problem of Ethereum as an ecosystem? But can this problem be solved by Polygon AggLayer, OP Superchain, cross-chain bridges/various interoperability services? Obviously it can’t be solved, but this problem seems to have never been carefully considered by the Ethereum Foundation. Of course, Vitalik did discuss it.
A few days ago, I saw something really funny. The founder of a ZK Rollup (note SCROLL) said, "Don't be sad because of Blast. Come to us to do tasks and help us to increase TVL." Isn't this funny? The TVL of Ethereum L2 is all such bubbles. What's the use? Look at the current usage of ZK Sync cross-chain bridge.
@thecryptoskanda made a distinction between “mass adoption” and “mass admission”. My view is that Ethereum’s dream is Wall Street, New York, and it can build an Atlantic City next to it, but it is unrealistic to directly transform the Wall Street building. These two views are not contradictory, the key is mass.
In the narrative of Ethereum, what is still attractive now is what Rubin said: Global Settlement Layer. This is also why its Gas was worrying when it was 1 Gwei. If settlement disappears, can it still be the Global Settlement Layer?
If Ethereum is the global settlement layer, then what is Bitcoin Chain? The narrative of BTC is simpler. Before, it was about payment, etc. Now, it is about value storage. In the upcoming report "Modular Blockchain", I will use an analogy to say that the power of Ethereum L2 and BTC L2 is different, one is gasoline and the other is electricity. The power of Ethereum L2 is applications, and the power of BTC L2 is the asset BTC.
We just discussed: "We are not saying that Ethereum is dead, we are saying that Ethereum should work hard :)" From the perspective of infrastructure, no chain currently has the complete architecture of Ethereum.
Is the Ethereum roadmap centered on Rollup still valid? In October 2020, Vatalik published a document confirming this roadmap, and it has been developed according to this roadmap so far. I think this roadmap is still valid, but there are several questions to be answered: 1. The liquidity fragmentation problem discussed above 2. Does Rollup have to be persistent?
I agree that there are indeed two problems: 1) Lack of large-scale applications - there are no new applications in this round, 2) Unreasonable capital structure - VCs are betting heavily on infrastructure. The problem with the Ethereum ecosystem itself is that although a lot of infrastructure has been built, almost nothing is prepared for the application cycle. According to the infrastructure/application rotation cycle, the application cycle will return soon. How should Ethereum respond?
This is a very interesting discussion. Here are some responses from senior practitioners to this tweet. Let’s take a look.
It’s not Ethereum’s problem, it’s the entire Web3 ecosystem that has problems. Traffic and value orientation have been hijacked by pseudo-user groups, and the healthy value proposition has been lost. It’s not solving real problems and needs at all. ——Meng Yan @myanTokenGeek
I think Ethereum’s current positioning is quite clear, that is, it is the most secure smart contract platform so far. Of course, these visions will gradually change with the market, just like Bitcoin is not entirely the original peer-to-peer financial system, but more towards value storage. The vision of digital gold has a protagonist in each cycle, and this version is not just Ethereum. These problems that are generally pointed out in the market now will sooner or later be reflected in other ecosystems. ——CM@cmdefi
From another perspective, only Ethereum has the ability to allow a hundred flowers to bloom, which has led to the fragmentation of liquidity, but it also reflects the strength of Ethereum from the side. Currently, ETH is in a stage similar to the Warring States period. After a long period of separation, there will be a reunion. Let's see which AppChain or L2 will eventually stand out! Looking forward to the return of funds to refocus on the applications on AVS or AppChain!
——RJ ♣️ @jimcurrywang
What problems can blockchain solve? This is something we need to think about. New asset classes? Permissionless information networks? Cultural value networks? Blockchain has not yet found the next real need to be solved by blockchain, apart from value storage (BTC), global payments (BTC & stablecoins), and gambling (CEX & DEX). Perhaps this is where public chains need to compete. —— Shrimp @shrimpwen
From a personal perspective, there are two core issues:
1. Lack of large-scale applications. The popularity of DeFi, GAMFi, and NFT in the last cycle has made everyone look forward to large-scale applications. Indeed, no matter how perfect the infrastructure is, if the application cannot be taken up, the final value will still be lost. Without large-scale application landing, it is difficult to generate value, and naturally there will be no injection of positive externalities. The final result of not seeing the application landing for a long time is that the market is increasingly skeptical about its future long-term value. Not only crypto, but every technological wave will be like this. This is the same as the current AI field: in the past year or so, technology companies have invested a lot of capital expenditures to build AI computing power and research and development of large models and other infrastructure, and the market is also full of expectations for the landing of AI, at least now this expectation is still there. However, if we still don’t see the rise of large-scale applications in another year or two, if the expected future commercialization income cannot cover the huge capital expenditure, then it is not value creation but value destruction.
2. The unreasonable capital structure leads to the distorted distribution of asset value in an environment of insufficient liquidity. Early institutions have obtained huge book profits (many of them may not have actually exited, but the numbers look good), and the project owners have dumped tokens to obtain actual profits, leaving the market and retail investors with a mess. —— qinbafrank @qinbafrank
(1) The most important thing is that the imagination of the entire industry is flawed during this bull market. There are no exciting new creations that attract a large number of users.
(2) Sometimes it is quite strange. For example, Sol suddenly rose to a hundred dollars last year. At that time, the ecological data (TVL, top DEX trading volume) did not match such a price. But strangely, as Sol rose, the ecological data gradually rose. The rise of the mother currency pushed up the valuation and imagination of ecological applications, and users and funds began to enter. At the same time, some people began to post memes (people who hold Sol make a lot of money and are willing to spend some money to play memes). Various leading applications began to have confidence and started to collect points and issue airdrops. Gradually, everyone found that Solana's TVL rose, and the trading volume of DEX even occasionally exceeded that of the Ethereum ecosystem. So sometimes I am confused. I don’t know whether the rise of Sol helped the application, or the ecological application helped Sol. So, is the current sluggishness of the Ethereum ecosystem because ETH has not risen significantly?
(3) Any development is a spiral upward, with stops and starts, and you catch up with me. So if the industry does not see the kind of super-imaginative innovation in the past, but an improved and iterative bull market, I think it is normal; if ETH changes its normal state this time and is no longer the leader of the rise, I think it is also normal. Just treat it with a normal mind. - Sandao @sdcrypto123
