Can Ethereum Still Win? | Roundup

David Hoffman publicly sold the rest of his ETH and posted about a broader sentiment shift, while Ryan from Bankless announced he is adjusting his positioning and letting Hoffman take more of a lead role on Ethereum coverage. At least five high-profile departures from the Ethereum Foundation occurred within the last month, including Julian Ma, Trent, Josh, Barnaby, and Tamara, who had been brought in to change direction as executive director and lasted roughly one year. Miles noted that Ethereum has had a people and culture problem for three to four years, with commercially minded factions that were put in place to help ETH compete being shut down and pushed out.

Vitalik remained effectively in charge despite Tamara nominally holding the executive director title, and the Ethereum Foundation's direction places Ethereum firmly in a Linux-style public goods camp that does not necessarily accrue value to the ETH asset. The Ethereum Foundation holds less than 0.1 percent of all ETH and receives no flow from staking or fee revenues, meaning it has no structural incentive tied to ETH price appreciation. There is no agreement within Ethereum leadership on what the project should be optimizing for, and the north star debate over how to value Ethereum remains unresolved with strong emotional baggage attached.

Miles argued that Ethereum is losing across the board on numbers from the field, including in areas that seemed untouchable, though Ethereum still holds approximately 30 percent of RWA market share excluding stablecoins. Solana and Hyperliquid were ahead of the practical commercial mindset shift and are performing best today, while Ethereum's share of net new activity in payments and overall growth continues to decline. Ethereum proactively pushed revenue-generating activity to rollups, which hurt its own revenue position, and speakers argued that remaining in the top three or four blockchains by revenue does not justify a 250 billion dollar market cap.

Dankrad left the Ethereum Foundation to start Tempo and proposed creating a new organization economically aligned with and accountable to Ethereum. His proposal calls for a leader who is competent and wants to fight, a board accountable to ETH price appreciation, and permanent funding from staking revenue, with a proposed minimum starting funding level of one billion dollars against Ethereum's current market cap of approximately 250 billion dollars. The most likely scenario described is that an independent organization will spring up to fill the coordination gap left by the Ethereum Foundation and build a large business doing so.

Institutions entering the space preferred to interact with Coinbase, Circle, Stripe, and Bridge rather than decentralized Ethereum governance structures, and those companies that owned institutional customer relationships are now launching their own infrastructure, which speakers identified as a direct problem for ETH. Morpho being deployed on both Ethereum and Arc was cited as an example of issuers now having a choice of settlement layer, with more centralized options becoming acceptable until demand for censorship resistance increases. The separation of Consensus as a commercial arm from Ethereum was described as probably a mistake in hindsight, and DAOs proposed as commercial arms were never convincing and lacked real authority.

Arbitrum and Optimism were identified as best positioned to act as the Red Hat to Ethereum's Linux, with Red Hat's 60 billion dollar acquisition cited as a benchmark for what an L2 could aspire to. The recommended strategic shift is for L2s to tell enterprise builders they are building on Ethereum, with the L2 acting as a service layer rather than a separate ecosystem. The SEC signaling support for putting finance on-chain and tokenized equities was cited as creating a large enterprise opportunity for Ethereum L2s specifically, though new competitors have enterprise-friendly features built in natively, making it harder for Ethereum rollups to add them retroactively. Private funding into ecosystem projects has also created incentive misalignment between L2s and Ethereum itself, and talent that was building rollups has largely departed to work on new L1 projects.

Speakers noted that if ETH had never been a token people held and wanted to appreciate, the project would be easier to manage and more analogous to Linux, and that Linux is better run than the Ethereum Foundation because it knows what it is and optimizes for that clearly. Looking ahead, it is unclear whether Bitcoin and Ethereum catch relative bids in the next cycle as in past cycles or get skipped in favor of projects that are easier to underwrite given current valuations and growth prospects.