Justin Bons, founder and chief investment officer of cryptocurrency fund Cyber Capital, believes that the Layer 1 blockchain Ethereum is in decline, while the Layer 2 network (Layer 2) is "dancing on its grave."
Bons said that Ethereum cannot sustain high fee income because it lacks capacity, and L2 usage and fees have hit new highs, but at the same time they are still lobbying to keep Ethereum’s capacity low, which Bons believes constitutes a "parasitism" relation". Bons wrote on the X platform on Monday (26th):
"Since the implementation of EIP-4844 (Proto-Danksharding), fee income has collapsed! This is why fee destruction can no longer catch up with the inflation rate, because L2s is taking away all fees! This is also the reason why ETH inflation has changed from L2s The reason for the increase since the takeover is because Ethereum has outsourced all execution work…”
Bons noted that the Ethereum ecosystem has been fragmented into different competing camps, destroying liquidity and composability. He doesn't think there's any real possibility of piecing these broken pieces back together because solutions like shared ordering are as counter to L2's interests as Layer 1 scaling.
Think there is little hope of moving to L1 capacity expansion
Bons believes this is what happens when Ethereum gets stuck in a centralized decision-making process, criticizing the Ethereum community’s complete rejection of on-chain governance as a result of being captured. Bons also said that L2 funds now dominate the Ethereum ecosystem, and believes that moving to L1 expansion has become impossible, because under the assumption that Ethereum expands L1 through new breakthrough technologies, all L2 will become obsolete and ineffective. necessary, causing their token and equity prices to collapse overnight. Bons wrote:
“L2s are actually stealing Ethereum’s users and fees by pretending they are the same as Ethereum, but they are not. At best, they are competitors; at worst, they are It’s a vampire attack that slowly sucks the life out of Ethereum. L2 will migrate or become L1, and Ethereum will die.”
Bons believes that venture capital institutions are also the driving force behind the decline of Ethereum. The expansion of Ethereum will destroy all the capital and fees earned by L2 because venture capital companies cannot profit from the expansion of L1. He criticized these institutions for having transformed Ethereum from a This kind of public property is twisted into a platform for rent-seeking activities.
