Author: Frank, PANews
As the bull market enters the Altcoin season, the time left for ETH seems limited. Since the end of 2023, the performance of ETH has been closely watched during this round of the upward cycle. However, ETH's performance in the past year seems to have fallen short of expectations. The most intuitive aspect is the increase in price - from October 2023 to the present, the maximum increase is 170%, repeatedly grinding at the $4,000 mark without a significant breakthrough. On the other hand, BTC's maximum increase during the same period exceeds 300%, and SOL has increased by more than 1300%. Many believe that ETH represents the arrival of the Altcoin season, but with the recent sharp short-term increases of many established Altcoins, ETH's momentum is clearly not enough.
The public chain leader Ethereum, from objective data, as Uniswap transitions to its own mainnet, the validators on the Ethereum network may lose $400 million to $500 million in annual revenue. But more serious than this economic loss is the threat to Ethereum's basic narrative as a deflationary currency. Uniswap's universal router is the largest gas fee account, accounting for 14.5% of Ethereum's gas fees, equivalent to burning $1.6 billion worth of Ethereum.
Summarizing the above indicators, the following characteristics can be summarized. The on-chain network activity of the Ethereum mainnet has not grown in the past year, and its proportion in the entire Ethereum ecosystem has also gradually declined. This at least indicates that the new users have basically chosen other Layer2 or other public chains (after all, emerging public chains such as Solana, Sui, and Aptos are maintaining rapid growth in these data).
Therefore, returning to the original topic, has the fundamentals of Ethereum undergone a major transformation? Or is the price of ETH undervalued? Looking at the data above, the Ethereum mainnet seems to be transforming into a capital settlement pool for large accounts and main forces, and even with a significant drop in Gas fees, it still cannot compete with Layer2 or other public chains in terms of transaction fees and speed. Therefore, the Ethereum mainnet is no longer the club of small investors, and it no longer has an advantage in the number of communities for popular tracks such as MEME. It is more suitable for players who do not require high frequency and require higher asset security. From this perspective, we can only say that the ecological role of the Ethereum mainnet is undergoing a transformation, and liquidity and security have become the last moat of the Ethereum mainnet.
