Over the past 24 hours, the crypto market has exhibited a complex development across multiple dimensions. Mainstream discussions have focused on the future prospects triggered by declining market confidence, talent drain, and a weakening narrative. Meanwhile, the attack on the Bitcoin payment network has once again amplified the risks of centralized infrastructure. In terms of ecosystem development, Ethereum continues to advance its technology roadmap around privacy and scaling, the privacy-focused L2 narrative is gaining traction, cross-chain settlement infrastructure is receiving increased capital investment, and the underlying structure of on-chain financial applications is still evolving.
I. Mainstream Topics
1. Discussion on the prospects of the crypto market
The crypto market remains highly uncertain, with several industry insiders recently expressing concerns about the industry's prospects.
Balaji argues that despite short-term price volatility, the crypto world will shift from "rules-driven" to "code-driven" in the long run, emphasizing the importance of internet capitalism and privacy. Altan Tutar, on the other hand, lists a series of negative signs, including Kyle Samani's departure from Multicoin, Nader Dabit's move to an AI startup, and Vitalik's admission that the Layer 2 approach has not been entirely successful, noting that the industry seems to be losing a "common enemy" that could build consensus.
Linda Xie revealed that many people she respects have advised her to leave the crypto industry and switch to AI or robotics. Cami predicts that the market will experience significant volatility over the next three months, with rational capital shifting to projects with sustainable cash flow or choosing to exit completely. He also noted that three key figures have already left in the past 48 hours.
Flood, analyzing the market from a trading perspective, suggests that this sell-off may involve sovereign wealth fund divestment, exchange liquidations, or a chain reaction of high leverage. Ignas believes that crypto natives are actively selling out due to fears of a "1929-style crash," creating an internal negative feedback loop. Miya even bluntly states that "crypto is over," noting that the VC system is slowly declining, LP commitments remain weak, many institutions have shifted to AI and robotics, and calls for attention to "valuable tokens" from Web2 startups. Arthur points out that this cycle is unfriendly to long-term investors, but traders have profited handsomely; from a longer-term perspective, continued investor exits may lead to a gradual depletion of liquidity.
Community reactions were clearly divided. On one hand, many agreed with the assessment of the industry's weakness. Raychi sarcastically remarked, "Price doesn't matter, but the portfolio has collapsed," AdimKarp questioned the accuracy of Balaji's past predictions, and Anatoly Karlin warned that once the rule-of-law order collapses, it will strengthen state power rather than the crypto system. Bruno Skvorc criticized the industry for being filled with "junk projects" and lacking true decentralization, calling for an end to the construction of meaningless L2 cryptocurrencies. LilMoonLambo argued that crypto should maintain its countercultural nature rather than cater to mainstream politics.
On the other hand, there were also relatively positive voices. Mert supported the narrative of "Capitalism 2.0," while THORChain emphasized that the demand for genuine DEXs still exists. Shamdoo and Mayhem questioned Samani's judgment, and Lily Liu suggested shifting the focus from the protocol layer to the application layer. Overall, the discussion centered on talent drain, narrative weakness, and opportunity costs; a minority believed that the "cleansing" might give rise to new life, but the majority of sentiments remained one of frustration and withdrawal.
2. Strike Bitcoin payment network suspected of being attacked by DDoS.
Strike founder Jack Mallers confirmed that the company's Bitcoin payment network suffered a DDoS attack, leaving more than 2.5 million users worldwide unable to send or receive BTC for approximately 183 minutes. Simon Dixon warned users to avoid lending Bitcoin and hinted that the shutdown of some lenders could trigger liquidation risks, but Mallers later clarified that no liquidations occurred during the incident.
The incident sparked ridicule about the reliability of Bitcoin as "the future of financial infrastructure." Accredited Financial Survivor pointed out that the attack did not affect the Bitcoin protocol itself; John Tuld questioned whether the timing of the attack was intended to cover up solvency issues. Victor Resto emphasized that centralized services are not the future, and CalmTraders believes that Bitcoin is neither the future of finance nor capable of serving as a store of value.
Urban Arson criticized the Lightning Network as essentially an IOU network, while Tyrannysaurusrekt and Paolo Aga used this opportunity to promote BCH as a true peer-to-peer cash solution. LC clarified that the problem lies with Lightning, not Bitcoin itself, and recommended Kaspa's "zero downtime" feature. RogeR implied a temporal synchronicity between the attack and the market sell-off, shifting the overall discussion towards the narrative of centralized risk exposure and alternative chains.
3. Circle announces partnership with Polymarket
Circle has announced a partnership with Polymarket, the world's largest prediction market, to drive the evolution of on-chain financial market infrastructure, focusing on stablecoin transparency, settlement reliability, and reduced transaction costs. Polymarket will migrate its bridged USDC (USDC.e) from Polygon to Circle's native USDC, enabling 1:1 direct USD exchange, thereby improving capital efficiency, scalability, and system reliability.
The community's overall response was positive. 0xWeiler emphasized the elimination of bridging risks, Peter Schroeder pointed out the symbolic significance of the collaboration, and Grazka and d1namit expressed excitement. Insight.eth viewed it as an important sign of the maturity of the on-chain market, Campbell inquired about its actual business impact, and Buy The Dip Bro was optimistic about the potential boost to CRCL's stock price. ME Group further elaborated on the details of the collaboration, KimcĦi called for support for USDC on Hedera, and LINK-BULL ennes pointed out that both parties are Chainlink ecosystem partners. The overall atmosphere was optimistic, but a few voices expressed concerns about the risk of regulatory freezes.
4. Vitalik Buterin discusses Ethereum's scaling path
Vitalik Buterin published an article exploring the possibility of achieving a 1000x scaling of Ethereum L1 through a "new state form." He points out that scaling execution and the data layer is relatively feasible, but scaling the state is more difficult. He suggests introducing a new, lower-cost but functionally limited state form while gently scaling the existing state. High-value objects (such as user accounts and DeFi contracts) should remain in the existing state tree, while ERC20 balances and NFTs can be migrated to the new tool.
In subsequent discussions, Vitalik criticized the excessive replication of the EVM chain and L1, calling for genuine innovation in areas such as privacy, application-specific efficiency, and ultra-low latency. He emphasized that the substance of "connecting to Ethereum" should match the hype, avoiding a one-size-fits-all approach to L2 bridging. He suggested that applications such as prediction markets might be better suited to an application chain architecture: issuance and resolution on L1, with transactions completed in a rollup-based system.
Discussions quickly intensified. Keone Hon suggested starting with database optimization and gas pricing mechanisms, including incentive state destruction. Poseidon argued that price scaling should be addressed first, while Markus.ai and Kaspa Hub used the opportunity to promote ICP and Kaspa as alternatives. Observe interpreted Vitalik's statement as a bullish signal, and Quai Network promoted its tree-chain structure.
Criticism also emerged, with Tony Montana accusing developers of dumping tokens. Binji interpreted this as a manifestation of "trust gradients," encouraging more honest architectural choices. Miralib, Z, and others continued to emphasize that Kaspa and ICP have already achieved their goals in practice. The overall discussion gradually evolved into a concentrated showcase of competing public chains, while also reflecting the community's complex emotions after Ethereum's limitations were publicly acknowledged: a mixture of disappointment and continued anticipation for innovation.
II. Mainstream Ecosystem Dynamics
1. Ethereum's privacy L2 narrative heats up
Payy_link has announced its migration from a standalone blockchain to a privacy-focused L2 blockchain on Ethereum, emphasizing a privacy-first, bank-grade on-chain experience. The project has secured support from Robot Ventures, 6th Man Ventures, dba_crypto, and Protocol Labs. The project aims to build on-chain banking services centered around stablecoins, which users can access directly through a downloaded app.
David Hoffman points out that this decision comes just one day after Vitalik announced that rollups are no longer considered a "centralized stopgap measure," further highlighting Ethereum's powerful network effect. While Vitalik's recent statements have emphasized the importance of L1 scaling, he has also clearly stated that L2 remains irreplaceable in specialized scenarios.
Besides Payy_link, privacy-focused Level 2 projects such as Aztec Network, Nillion, 0xMiden, and COTI Network are also making continuous progress. Meanwhile, institutional privacy working groups are discussing the possibility of the banking system migrating to Ethereum Level 2, believing that "cryptographic privacy" is superior to traditional policy privacy in terms of mathematical verifiability. Confidential Layer has integrated Base, providing users with instant privacy access capabilities.
In addition, Vitalik also released a privacy roadmap for Ethereum L1, covering on-chain payment privacy, partially anonymous application activities, RPC call privacy, and network layer anonymity, signaling that Ethereum is systematically improving its privacy capabilities.
The community as a whole highly approves of Ethereum's progress in the field of privacy. rip.eth believes that there is no need to build a privacy-oriented alt-L1 anymore, and Ethereum has the potential to become the infrastructure for "default privacy," and its scale is large enough to be difficult to completely block. Leo Lanza emphasized that while L2 inherits the security of L1, it also provides a realistic path for institutions to adopt "mathematical privacy" rather than "policy privacy."
XT Exchange summarizes Vitalik's privacy roadmap, believing the goal is to achieve default private transfers and threat resistance. Master Mute predicts privacy will become a long-term meta-trend, but too many independent privacy chains may be unnecessary; Ethereum may have built-in privacy capabilities. Mert draws an analogy between the trade-offs between privacy design and performance and the differences in the approaches taken by SOL and ETH.
AminCad clarified a misunderstanding of Vitalik's views, emphasizing that his core principle remains supporting L2 specialization, and the future form will be "one L1 (Ethereum) + multiple L2s." MIKS described the current situation as "extremely unusual," and GPT360 believes the Ethereum narrative remains resilient. Streamr highlighted the importance of decentralized ordering to avoid censorship risks.
A few dissenting voices have emerged, such as Brahddah.eth questioning Aztec's privacy statements or using the opportunity to promote competing chains like ICP. Overall, market sentiment is optimistic, believing that privacy-enhancing Level 2 technology is strengthening the depth and scope of the Ethereum ecosystem.
2. Relay completes $17 million Series B funding round.
Relay Protocol announced the completion of a $17 million Series B funding round, led by Archetype and USV, and simultaneously launched Relay Chain—an L2 infrastructure designed specifically for "instant cross-chain settlement," supporting the instant transfer of any asset and any chain.
To date, Relay supports over 85 blockchains, processing over 100 million transactions with a cumulative transaction volume of $20 billion. The core objective of this round of financing is to solve the problem of fragmented on-chain funds, enabling users to complete asset transfers without being aware of the complexities of inter-chain transactions.
Previously, Relay (formerly Reservoir) completed a $14 million Series A funding round in February 2025, focusing on a unified cross-chain token trading experience. Similar projects include Analog, which completed a $16 million funding round in 2024, focusing on cross-chain communication infrastructure.
The community response was enthusiastic. Leading products such as MoonPay, MetaMask, and Phantom offered their congratulations, emphasizing that this is a significant milestone for cross-chain infrastructure. Max Segall and deployers expressed a clear bullish outlook.
Crickhitchens focused on Relay's data availability (DA) options and recommended Celestia as a potential solution. Anon Vee reviewed their Series A coverage, stating that Relay's bridging solution boasts high reliability. Bigchops considered this a "long-delayed but highly effective" announcement, and ALVIN predicted that the cross-chain payment landscape might undergo significant changes as a result. Fundraising Digest systematically compiled the financing structure and background.
While the overall sentiment was excited, some discussions focused on technical details, such as the choice of DA solution and long-term scalability. Overall, however, Relay is widely regarded as one of the key players in solving the cross-chain fragmentation problem.
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