Ethereum is really confused now. The price can't go up, and the big guys either withdraw their investment or switch to Solana. The weekly meeting is like a vegetable market, with various proposals being argued over. Moreover, there are more and more competitors, not only competing with Ethereum for the market, but also challenging its philosophy and business model.
To put it bluntly, Ethereum is now a business, and it makes money from transaction fees. Don't listen to them saying that low transaction fees are good for everyone, that's all nonsense. People who hold ETH hope that the fees are high so that their ETH can be valuable. They are particularly dissatisfied with those parasitic L2s (which claim to be to solve the scalability problem, but are actually here to take a piece of the pie), and feel that they are eroding their profits. When the fees are high, the price of ETH rises; when the fees are low, the price of ETH falls. More than 90% of the Ethereum Foundation's budget is supported by transaction fees. Everyone says that blockchain requires fees, but there are so many fair incentive models, and Ethereum just clings to this outdated business model.
The problem doesn’t end there. Ethereum is now betraying its own original purpose and the original vision of crypto purists. Remember MEV? It was about making money by reordering transactions in blocks. Everyone was shocked at first, but then they accepted it in order to make money. This is naked greed and the exact opposite of the original intention of a decentralized network. And the big financial institutions that invested billions of dollars in Ethereum only care about their own return on investment, and don’t care about the ideals of decentralized finance and don’t want to support this concept.
Looking at Vitalik's future roadmap, you can feel that he wants to reform, but he is hesitant and doesn't know how to solve the many problems and contradictions in the network. In private, he sighs more and more. He is caught between his lofty ideals and the needs of the "board of directors" and investors.
The most obvious technical problem is that Ethereum is not that decentralized anymore. Same with Solana. The decentralized ideal of blockchain has long been abandoned for those who only care about money. Right now, 90% of the blocks on Ethereum are produced by three block builders. Do you know why? Because block building makes sense at scale, and it’s more advantageous in cheap data centers, and not so much for individuals. The larger the network and the more influential the stakeholders, the more they want to centralize control. Just like Bitcoin mining has become centralized, there is little value in a single computer competing. Ethereum has been usurped by large corporate interests, and neither currency is the “people’s currency” anymore. This is why we see so many great competitors, such as Kaspa to fight Bitcoin, SpaceMesh as the real RMB, Alephium as a safer and fairer smart contract platform, etc.
In order to fight against MEV, Ethereum introduced the MEV-Boost auction, which was originally intended to reduce and prohibit malicious behavior of "on-chain front-running". However, the result was that the positions of the three giants were more solid.
Ethereum is no longer attractive to the general decentralized community. The cost of participating in the private order flow MEV is about 1.5 ETH, and new players are scared away by this threshold, while the existing giants are happy to play. Vitalik introduced the Proposer-Builder Separation, but it didn't help.
At the heart of the debate is transaction ordering. Most L2s rely on a single orderer, which is the exact opposite of the idea of decentralization. The Ethereum guys wanted to create a "shared orderer," but it didn't work: it was the single orderer that made L2 profitable, at the expense of Ethereum. This ultimately requires real-time composability or "synchronous composability," but many researchers believe that linear blockchains can't do that. To do that, you need a directed acyclic graph (DAG) or lattice structure.
For example, transaction sorting is like buying milk tea. If someone is ahead of you, you need to queue up. But now the sorter and validator of Ethereum's second-layer network are all self-designated nodes, which is out of the principle of decentralization. If the sorter is controlled by a small group of people, it is vulnerable to centralized attacks and loses security guarantees.
Some chains don’t have these problems like Ethereum, like MultiversX. Ethereum is like putting a “band-aid on a cancer patient”, while other projects are starting from scratch and completely avoiding the “blockchain trilemma”.
People who are new to blockchain today still learn about the “two giants” first. All the wisdom of Bitcoin consensus is attributed to Satoshi Nakamoto (actually a team of seven people), while the wisdom of the smart contract platform is attributed to Vitalik. This is actually unfair. Ethereum used to have many co-founders, but they all left, and for a reason! However, in school, new blockchain enthusiasts are shown an outdated picture of blockchain, misleading them into thinking that Ethereum’s Solidity smart contracts and EVM are the greatest invention since sliced bread. Innovation moves fast, but Ethereum benefits from the inertia of education.
Ethereum’s ecosystem is also a problem. It’s too large, becoming inflexible and often unwilling to support its own ecosystem. And because it’s so entrenched, there are inherent alignment issues when it comes to combining decentralization with collaboration. The challenge for the Ethereum team is to ensure that diverse projects can contribute to a unified vision. But this concept has historically been poorly defined, which has led to the risk of being controlled by the “social layer”.
