Why can’t Ethereum be hard?

Source: C Labs Encryption Observation

Three years ago you entered Ethereum for more than 4,000 U

Then uninstalled the exchange

Work diligently and live seriously

You firmly believe in the future of encryption

I heard that Bitcoin has been over 90,000 in the past two days

I heard that Ethereum is going crazy

The tears that can’t be stopped are flowing. You are finally back

Opened the exchange under the attention of the whole family

Looking at Ethereum with more than 3,000, I suddenly felt a little at a loss

Why is this happening? Why can’t Ethereum be hard?

In fact, from the perspective of currency price, Ethereum, which has been denominated in Bitcoin, has maintained a downward trend:

Anyway, there are many different opinions, so what’s wrong with Ethereum?

Today, from the perspective of the rise and fall of the dynasty, Dapiao will talk to you about what happened to Ethereum.

Why use dynasty as an analogy instead of a commercial company?

Because the survival of commercial companies is mainly supported by cash flow, which either makes money by business or requires VC investment.

Ethereum actually does not have this pressure. As the most comprehensive crypto project at present, it is more like a regime.

There are many ways of survival for a regime. They can do business to earn cash flow, collect taxes like gas fees, and issue various new assets in the ecosystem.

At its peak, the Ethereum ecosystem was a must-have for almost all crypto projects, and it is no exaggeration to say that it is the Ethereum Dynasty.

There are only three reasons for death in previous dynasties:

Official changes, civil changes, and foreign invasions.

If we apply our Chinese history, about 40% of dynasties died from official changes, 40% died from civil changes, and 20% died from foreign invasions.

Official changes: Central governance is aging, and the princes will not lose their tails

Let’s take a look at the official changes first.

There are two forms of the so-called official change. One is the internal division of the central government. For example, Wang Mang of the Han Dynasty usurped power and Zhao Kuangyin of the Song Dynasty, the Chenqiao mutiny of Zhao Kuangyin were all considered official change.

The central government of Ethereum has actually split a lot.

There were several public rebellions from the early co-founders of Ethereum

For example, Charles Hoskinson created the Pos public chain Cardano, while Gavin Wood launched Polkadot.

Moreover, both chains are called Ethereum killers.

However, the Zhou emperor had a prosperous country and many supporters, and these early rebels had almost no major climate.

The most successful official transformation in our crypto circle is Binance. CZ and the No. 1 sister, who was the core member of OKX Central, ran away, and now they have made Binance the first in the universe.

Before analyzing the situation of Ethereum Central, let’s take a look at the architecture of Ethereum Central. Here are the three commoners and six nobles of Ethereum:

Many people think that God V is the emperor of Ethereum, but it is not. As a decentralized organization, Ethereum has no emperor. It can be regarded as a dynasty with a constitutional dynasty.

The V God is currently ranked second among the three officials. Judging from daily work, the V God is more like a censor and can influence public opinion in the court and the public.

Among the Six Qings, there are also those who openly sing opposites to the V God:

Peter directly complained on Twitter that the route of Ethereum is not clear

In fact, sing a counter-topic quarrel is not a big deal, but what everyone complains about the foundation is that they suspect that these people are stingy and enjoy their own pockets.

For example, two of the Six Lords, Justin Drake and Dankrad Feist, disclosed that they had previously become consultants of EigenLayer and would receive EIGEN tokens that “may exceed the sum of their existing wealth.”In the community’s view, this “both wanted and wanted” behavior is really ugly, and some people joked that EF researchers “are pledging themselves.”

Although the above mentioned that the two researchers resigned as consultants of EigenLayer some time ago, it is obvious that there have been ambushing the capital that has long appeared around the Ethereum Foundation. They either entrust advisory positions or directly sponsor the researcher’s personal research.And these foundation members themselves do not seem to be disgusted with this.

Of course, the one who is hunted the most is the V god with the greatest personal influence.

In the eyes of the market, Vitalik is the orthodox. As long as it is related to Vitalik, it will be recognized. This recognition extends to all aspects of the ecology.

The most classic case is Scroll. During the prevalence of L2 narrative, it rose from an inconspicuous “Chinese native dog” to a $1 billion mainstream L2 of Saigao Starktnet, z kSync, etc. The origin is because a letter was founded byThe email to EF was answered by Vitalik.

It is precisely because the foundation of Ethereum Central has been hunted for a long time, since you can make money by lying down, why do you have to stand?

What Ethereum really fears is the rebellion of the princes.

The current relationship between Ethereum main network and L2 is actually very similar to the relationship between the Tang Dynasty and the various Jiedu governors, not like the Spring and Autumn Period and the Warring States Period.

Because the various princes in the Spring and Autumn Period and the Warring States Period fought against each other and there was no external pressure.

The Jiedushi in the middle and late Tang Dynasty mainly tried to prevent foreign enemies.

Ethereum vigorously promoted L2 in the past two years, in order to defend against attacks from various performance chains, and successfully dismantled many performance chain ecosystems known as Ethereum killers.

The current situation is: the Ethereum main network accounts for about 55% of the assets of each public chain, and it can still have a majority position.

But Tron/Solana/BSC, which are ranked behind, is no longer the L2 of Ethereum.

At this time, there are two options to choose from in the center of Ethereum:

First, to make the main chain bigger and stronger. When the Song Dynasty fought against Liao, Jin and Mongolia, it chose this path.

The second way is to let L2 compete with other public chains.When the Tang Dynasty faced the Turks, Cixi later chose this path.

Judging from the roadmap released by Ethereum, facing a fierce opponent like Solana, it may be powerless to improve the performance of the main chain, so you can only let L2 continue to roll performance.

Let’s talk about the competition with other public chains such as Solana later. Let’s take a look at the situation of L2 on Ethereum.

From a data perspective, there are only two chains that can truly help Ethereum resist foreign enemies: Base and Arbitrum.

This is actually very similar to the situation in the middle of the Tang Dynasty. There are two main groups that can be fought: An Lushan in the east and Geshuhan in the west.

Moreover, these two L2s are each abacus. Arbitrum blatantly develops Layer3 and even accepts USDC as gas fees, which means that he should be the emperor’s rhythm. And the strategic choice of Base chain is definitely to give priority to Coinbase’s interests..

In 2017, BNB was first published on Ethereum. Binance chose to rebel and built its own Binance Chain. It has to be said that Binance is really full of rebellion. It has caused a partial rupture in the central government in OKX, and also caused a rebellion in Ethereum..

Most other L2 projects, not to mention protecting Ethereum’s central position, are almost always positioned as a wool-like position.

On the one hand, these L2s have raised a large amount of funds from VCs, and on the other hand, they have attracted a large number of users’ Ethereum tokens using airdrops as bait.

As the saying goes, eating tightly in the front and tightly in the back is probably the Layer2.

A lot of funds and development have invested in a lot of invalid duplicate infrastructure, so that V God also announced in the second half of this year that it will no longer support the new L2 project. This year, the Layer2s on the chain will be released after the airdrop ends.All assets and users have basically run out of the way.

Foreign enemy invasion: other public chains are strong, consensus is dispersed

After talking about the great success of the princes of Ethereum, let’s take a look at the foreign enemies facing Ethereum.

The troubles of Ethereum now are Solana

Crpyo’s several major innovations in the past, including ICO in 2017, Defi Summer in 2020, Gamefi and NFT in 21-22, etc., without exception, all happened on Ethereum, and it is the main network of Ethereum.

As for the original narrative of the market, whether it is meme, AI/payment, etc., many projects choose Solana or other high-performance chains.

Specifically speaking, the AI ​​and meme are fighting between Solana and Base.

The new track of AI Meme was born directly from Solana, and it also received the support of A16Z.

Base has previously completed the first AI-to-AI payment in history, and recently launched a new set of fully on-chain AI agents, which can create an Al Agent with its own crypto wallet in 3 minutes.

In the payment track, Ton is eyeing nearly 1 billion users with telegram, and is definitely a small role that Ethereum cannot ignore.

Moreover, relying on telegram fission this year, Ton has robbed gamefi’s market share.

If three years ago, Ethereum could represent the development direction of crypto application innovation.

But until now, I believe that this consensus has been basically dispersed, and no one should be sure that the large-scale implementation of encryption applications will definitely happen in the Ethereum ecosystem.

At least Solana and Ton have a great chance.

Civil Rebellion: The industry has entered a period of disillusionment, and the implementation scenarios are limited

In addition to the internal and external troubles mentioned earlier, Ethereum’s recent weak currency price is also the fact that Ethereum supporters may have to change their minds.

It has been nearly ten years since Ethereum released its main network, with a total market value of US$300 billion, which is a huge behemoth among all kinds of assets around the world.

The largest asset scale in the world is gold, with US$18 trillion

Bitcoin has now surpassed silver, 1.8 trillion, ranking seventh, ten times lower than gold.

Ethereum’s market value ranks 29th in the world, and this ranking is not low. It includes Cleaning and Cosco Bank in the front, and Netflix and Bank of America behind.

There is a saying in the financial industry that after an asset reaches a market value of US$300 billion, it will be difficult for it to rise. If it goes up, it must rely on performance. It will be difficult for the original supporters to continue to maintain it.

Bitcoin is still making rapid progress now, but Ethereum has insufficient momentum. If this continues, Ethereum denominated in Bitcoin may reach 0.02 at this time next year.

Why is this?

There may be three categories of supporters of Ethereum.

The first category is miners. As early as when Ethereum was still in the POW model, many miners supported Ethereum; later Ethereum changed from POW to POS, and the miners were considered to be completely offended.

The second category is various on-chain users. These users contribute most of the gas fees of the Ethereum ecosystem, and can be said to be a real parent of food and clothing.However, in the absence of on-site application scenarios on the chain, there are almost only two things to do on the chain: stir-frying meme and picking hair.

In this round of meme battle, many users switched to solana; and the hair-beating party was even more heartbroken. From zksync to scroll, key projects of the Ethereum ecosystem have a posture of not being afraid of boiling water, and they are forced to do so.Force users to the ton chain to get rid of the game.

The third category is Ethereum investors, and there are also people who are very strong in supporting Ethereum for a long time.

But what’s interesting is that the Ethereum Foundation can always sell coins accurately when the currency price trend is good:

Especially the two moves in 2021, one was when 35,000 Ethereum were sold for US$35,333.2 two days before 519;

Another time, Ethereum sold 20,000 Ethereum at its all-time high of US$4677.6.

These two precise escapes established the reputation of the Ethereum Foundation’s signal to smash the market.

In the past year, the Ethereum Foundation has taken frequent operations and has operations almost every month.

After such a wave of sensational operations, it can almost be said to have caused many investors’ hearts.

At the same time, look at other people’s Bitcoin. The miners not only continue to support them, but also many large miners can go public on the Nasdaq and raise funds to make calculations.

With the development of the bit ecosystem this year, there are also meme players and hair-pushing parties on the bit chain, and they have even contributed about 10% of the miners’ income.

On the investors side, not only is there no so-called foundation selling coins, but the narrative of store of value continues to gain recognition from the mainstream market. Maybe the United States will list Bitcoin as a federal reserve asset at any time.

It can be said that there are more and more supporters of Bitcoin, while there are fewer and fewer supporters of Ethereum.

Question summary

Speaking of this, let’s summarize:

First of all, the internal concerns. The Ethereum Foundation is actually a bit strange now. It is almost hunted by capital. The foundation members make a lot of money, but the foundation also sells coins from time to time to maintain operation.

The other is the development strategy of layer2. Judging from the current situation, Ethereum can only play layer2, Arbitrum and Base chains, and most of the other layer2s are dragging their backs.

If this situation continues to evolve for a long time, as long as Arbitrum and Base rebellion, the Ethereum ecosystem will be in name only.

Against this background, Ethereum’s external concerns are also very serious.

In history, every scene that triggered a bull market in crypto has been in the Ethereum ecosystem, and almost 90% of VC investments are projects investing in the Ethereum ecosystem.

But this year it is very likely to happen in solana and Ton, and a lot of VC investment has been spread to the Solana and Ton ecosystems.

Since 2022, Ethereum has offended miners and this year it has offended the Maozhu party. With the sluggish currency price, the Ethereum Foundation is still selling coins, and it is almost overturning investors.

I have to say that this situation is really hard to deal with.

Generally, it is difficult for dynasties to reverse the situation at the end.

What should I do?

Da Beautiful is here to make a random move ~

For example, should members of the Ethereum Foundation share part of the money they go outside as consultants to the foundation?Because they were looking for you for your identity

Maybe in this way, the Ethereum Foundation not only does not have to sell coins, but also has additional profits to repurchase Ethereum, right?

In the outside encryption circle, there is no contradiction that cannot be solved by pulling the market. If there is, it means that it cannot be pulled enough; if it is pulled well, maybe Ethereum will usher in ZTE like Tongzhi of the Qing Dynasty~

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