Ethereum’s Fate: Death by Design

If you’ve been involved in the crypto world for a while, you’ve likely heard of the concept of an “ETH-killer” – alternative Layer 1 blockchains that claim they can surpass Ethereum as the leading blockchain, only to fall short of that goal. It’s ironic that despite all the claims, no other blockchain has been able to replicate the widespread adoption and network effects that Ethereum has achieved. The only exception might be Solana, but even then, Ethereum has created its own challenges through its design choices. As more applications are developed on Ethereum, the demand for block space increases. However, the Ethereum Foundation seems to be neglecting this issue.

Although Ethereum has implemented scalability solutions like rollups, there are still limitations when it comes to settlement and decentralized applications. If the few applications that bring value to Ethereum are forced to move elsewhere due to these limitations, what will be left to support the value of Ethereum? The success of a protocol layer like Ethereum depends on the applications built on top of it. This is one of the key ideas behind the “fat protocol thesis” – that value flows from these applications back to the protocol layer.

Ultimately, the value of a blockchain is determined by the sum of the applications running on it. This is the crucial point that the Ethereum Foundation needs to address. If Ethereum cannot provide the necessary infrastructure for these applications to thrive and grow, it risks losing its position as the leading blockchain. The competition from other Layer 1 blockchains only adds to this pressure.

The success of Ethereum has been built on a vibrant ecosystem of decentralized applications and smart contracts. However, without addressing the scalability and block space issues, this success may be short-lived. Ethereum must find a way to support the growing demand for block space if it wants to remain the dominant blockchain in the market.

In conclusion, while Ethereum has achieved significant success in the crypto world, it now faces challenges that could threaten its position as the leading blockchain. By addressing the issues related to block space and scalability, Ethereum can continue to grow and evolve. The future of Ethereum depends on its ability to adapt to the changing needs of the market and the demands of decentralized applications. Only time will tell if Ethereum can rise to the challenge and maintain its status as the top blockchain in the industry.