Ethereum is dead. For several venture capital, Ethereum has ceased to be a relevant active investment. Layer-2 solutions, poorly controlled inflation, loss of income … Ethereum seems to be taken in a spiral which calls into question its long-term financial viability. Decryption of a major strategic tilting.
Ethereum died as an investment …?
Criticism comes from inside. Quinn Thompson, founder of Lekker Capital, does not go there by four paths: “Ethereum died as an investment. According to him, the lack of growth of crypto users, the drop in activity on the chain, the fall in revenue and a poorly calibrated tokenomics made ETH drop out of its status as an active refuge. And he is not the only one to think so.
Since the explosion of Layer-2 solutions like Arbitrum or Optimism, a good part of Ethereum's economic value has moved. These secondary networks alleviate the main layer, of course, but also absorb an increasing part of the generated value. Nic Carter, from Castle Island Ventures, sums up the situation: “The L2 siphon the value of the Layer-1[…] He committed suicide “Result, the basic Ethereum no longer captures much of the transactional boom which he nevertheless initiated.
To this is added another problem: inflation of the token. The EIP-1559, supposed to make Ethereum deflationist, no longer holds its promises. The recent update Dencun even revived the Net show. No more narrative of “Ultrasound Money”? Maybe. In any case, this complicates the thesis of an ETH designed to preserve the long -term value.
The Ethereum Foundation reacts!
Faced with this disaffection, the Ethereum Foundation reacts. Vitalik Buterin offers a roadmap focused on the security and finalization of L2. The objective: to strengthen the interoperability of the network, again attract Crypto developers and restore weight to the overall infrastructure.
But the question remains: is it enough to rekindle the interest of crypto investors? As long as the main network does not better capture the value and the economic model remains vague, ETH may remain in the shadow of its own ecosystem.
Ethereum remains a driving force in web3 innovation, and the 850 billion in volume of Stablecoin is proof of this. However, its positioning as an investment actor vacillates. Between dilution of value and inflation poorly mastered, the ETH must review its fundamentals if he wants to regain the confidence of the crypto market. Without rapid development, it may become a simple infrastructure tool.
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