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Host: Alex, Research Partner at Mint Ventures
Guests:
- Zhou Qi, Founder of EthStorage
- Lawrence, Researcher at Mint Ventures
Recording Date: June 5, 2025
Why Ethereum Underperformed BTC and SOL This Cycle
Key Factors Behind Ethereum’s Weak Performance
Layer2 Strategy Misalignment
- Ethereum’s Rollup-centric approach created incentive incompatibilities, where L2 value (e.g., Arbitrum, Base) failed to benefit Ethereum’s core layer.
- Post-EIP-4844, reduced L2 fees diluted ETH’s economic capture.
Slow Engineering Progress
- Upgrades take 1–2 years to implement vs. Solana’s aggressive iterations.
- Example: Block-level access list optimizations (proposed in 2023) only gained traction in 2025.
Structural Rigidity in Development
- Multi-client model (Geth, Nethermind, etc.) creates coordination overhead.
- Overemphasis on solo staking and decentralization slows decision-making.
Narrative Shifts
- DeFi innovation stagnated, while BTC (ordinals, ETFs) and SOL (meme coins) captured attention.
- Regulatory leniency reduced urgency for Ethereum’s anti-censorship features.
👉 Discover how Ethereum’s new roadmap could redefine scalability
Consensus vs. Disagreements Within Ethereum’s Community
Agreed Problems
- Layer2 pivot needed: Vitalik’s recent reprioritization signals a shift toward L1 scaling.
- Engineering bottlenecks: Nethermind’s 4–5x performance boost exposed untapped optimizations.
Unresolved Debates
- Decentralization trade-offs: How much efficiency can Ethereum sacrifice for ideological purity?
- Governance inertia: Vitalik’s influence vs. new leadership (e.g., Tomasz Stańczak) pushing pragmatism.
Ethereum’s Reform Timeline: Critical Milestones
| Event | Expected Timeline | Impact |
|--------------------------------|------------------|----------------------------------------|
| L1 10x Scaling | Q4 2025 | Gas limit hikes + execution-layer optimizations |
| Foundation Restructuring | Mid-2025 | Streamlined teams, focus on core upgrades |
| 100x Scaling Roadmap | 2026–2027 | Sharding + parallel execution research |
Notable change: Portal Network’s abrupt cancellation shows ruthless prioritization of scaling.
Bullish Cases for Ethereum
Reasons for Optimism
✅ Developer moat: Strong EVM ecosystem vs. newer chains.
✅ DeFi resilience: RWA, Ethena, and Perps innovations still favor Ethereum.
✅ Underestimated upgrades: Nethermind’s optimizations prove >5x latent capacity.
Market Blind Spots
- Vitalik’s pragmatism shift: His recent focus on "ultra-scalability" is underappreciated.
- Political engagement: ETH’s neutrality may become an asset in geopolitically fragmented markets.
👉 Explore Ethereum’s staking evolution post-Merge
When to Increase ETH Allocation
Triggers for Buying
🔹 Vitalik’s mea culpa: Public acknowledgment of past missteps (e.g., Rollup overreach).
🔹 Aggressive L1交付: Gas limit hikes + client optimizations hitting testnets.
🔹 Regulatory tailwinds: Clearer U.S. stance on ETH’s non-security status.
Risks to Monitor
⚠️ Slow cultural change: If decentralization dogma stifles >10x scaling.
⚠️ Competitor traction: SOL/SUI capturing next-gen apps (e.g., AI+blockchain).
FAQ
Q: Is Ethereum abandoning Layer2?
A: No—but L1 scaling is now the priority. L2s may evolve into specialized niches (e.g., privacy rollups).
Q: How realistic is 10x scaling by 2025?
A: Achievable via gas limit adjustments + existing client optimizations (tested 4–5x gains already).
Q: Will staking yields rise post-scaling?
A: Likely. Higher L1 activity boosts fee revenue, but watch for MEV reforms.
Q: Should I worry about Solana’s dominance?
A: Short-term yes (narratives), long-term no—ETH’s modular stack suits complex financial apps.
Final Thought: Ethereum’s rebirth hinges on balancing idealism with shipping velocity. The next 12 months will reveal whether it can out-innovate while preserving what makes it unique.