Can Ethereum Still Win? | Roundup

David Hoffman publicly sold the remainder of his ETH and posted about a broader sentiment shift in the space. Ryan Adams announced he is adjusting his role at Bankless, letting Hoffman take more of a lead. These moves reflect a wider loss of confidence in Ethereum among people who were previously among its most vocal advocates.

At least five high-profile departures from the Ethereum Foundation occurred within the last month, including Julian Ma, Trent, Josh, Barnaby, and Tamara Jovanovic, who had taken over as executive director and lasted roughly a year. Jovanovic was seen as a commercially minded leader who could make Ethereum more competitive but was effectively pushed out. The analogy offered is Bob Iger returning to Disney and ousting his successor Bob Chapek, with Vitalik remaining in practical control of Ethereum without formally acknowledging it.

Ethereum is losing ground across the board, including in areas that seemed durable. It still holds roughly 30 percent of RWA market share excluding stablecoins, but net new activity market share is declining as competitors gain ground in payments and overall growth. There is no agreement within Ethereum leadership on what metric to optimize for, whether fees or something else. Ethereum is directionally moving toward a Linux-like role, foundational and useful but not necessarily capturing value in 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. Ethereum's current market cap is approximately 250 billion dollars, and while it remains in the top three or four blockchains by revenue, speakers argue that figure is not commensurate with that valuation.

Ethereum proactively pushed activity to rollups, which hurt its own revenue position. Consensus being a separate commercial arm from Ethereum is viewed in hindsight as probably a mistake, with MetaMask having been the initial revenue generator within that ecosystem. Companies like Coinbase, Circle, Stripe, and Bridge owned the customer relationships with net new institutions entering crypto, and those same companies are now launching their own infrastructure, compounding Ethereum's competitive problem. Infighting about the roadmap and the relationship with rollups has made it difficult to invest time and energy in Ethereum for years, and AI is pulling some Ethereum Foundation talent toward starting new projects, compounding the attrition problem.

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 minimum of one billion dollars in starting funding, a leader who wants to fight, a board accountable to ETH price appreciation, and permanent funding from staking revenue. He believes the organization will eventually happen but may take a long time to reach consensus given Ethereum leadership's resistance to urgency-driven reform. Ideas including business development, DC lobbying, application layer building, and a commercial ETH-holder organization have not been implemented due to a lack of urgency. Institutions seeking to tokenize assets want to speak with credible, authoritative parties, which decentralized structures cannot provide, and DAOs proposed as commercial arms of Ethereum were viewed skeptically as lacking real authority or decision-making power.

The SEC signaling it wants to move finance on chain and enable tokenized equities is identified as a major recent development. Target customers for an Ethereum-native rollup platform would include fintechs, banks, financial services companies, and the DTCC. Enterprise customers do not care about single sequencer architecture or transaction batching mechanics, and features like transaction reversibility after a hack, which rollups were previously criticized for, are viewed as selling points by enterprise customers. The cultural environment has shifted such that criticism of centralized or proof-of-authority chain design no longer carries the reputational cost it did in 2022 or 2023, making it harder for Ethereum rollups to add enterprise-friendly features retroactively against competitors that built them in natively.

Arbitrum is identified as best positioned to be the Red Hat to Ethereum's Linux among current L2s, with Optimism also considered well suited for a similar role. Red Hat sold for 60 billion dollars, cited as an aspirational benchmark outcome for an L2. The L2 sequencer market is predicted to consolidate significantly, and a winner may gain enough authority to act as a business development function for Ethereum. The most likely scenario described is that an independent organization springs up to fill the enterprise coordination gap and builds a large business rather than the Ethereum ecosystem organizing itself. All assessments about Ethereum's trajectory are noted to change if a credible figure like Vitalik announces a shift toward fee generation and value capture. If the macro environment improves, crypto assets broadly may replay past cycle dynamics with Bitcoin catching relative bids rather than Ethereum specifically recovering, and many projects are described as easier to underwrite than Ethereum right now given valuations and relative growth prospects.