Recent negative comments about Ethereum (ETH) mainly focus on the following aspects:
1) Ethereum’s current revenue is significantly lower than the previous bull market (mainly due to the popularity of Layer 2 technology), but its price is close to its historical high;
2) A more competitive Layer 1 ecosystem (with a higher wealth effect) Solana has emerged in the market;
3) After the Cancun upgrade, Ethereum's expectations for Layer2 fee income have been significantly reduced. These negative views indicate that the market is cautious about Ethereum's prospects, especially when Layer2 and Solana have an impact on Ethereum's revenue. But from the perspective of ecological influence, Layer2 still has huge room for growth after the Cancun upgrade and has sufficient expansion potential. A research report on Ethereum Layer2 by VanEck pointed out that by 2030, the market value of Ethereum Layer2 may reach 1 trillion US dollars. The report emphasizes the important role of Ethereum Layer2 in expanding the Ethereum network and improving developer and user experience.
Regarding Layer2 projects, there are two examples worth noting, one is BaseChain and the other is Metis. BaseChain is dominated by Coinbase, so Coinbase has the motivation to promote the development of the BaseChain ecosystem, which is basically similar to Solana's approach. On the other hand, Metis adopts a decentralized sorter approach, which does not rely on centralized income, but builds a flywheel through ecological incentives. Metis's approach provides a guiding idea for other Layer2 projects, that is, to attract developers and users through ecological incentives.
In general, the Layer2 market is highly competitive, but it is also a pattern of flourishing. Different Layer2 projects compete for users and developers in different ways. Some of them are backed by large companies, such as BaseChain, and some are developed through the token flywheel model, such as Metis.
