Original author: Ignas | DeFi
Original translation: TechFlow
Ethereum’s market sentiment has turned extremely bearish for the fourth time this year.
There is a growing awareness that the concept of “ultrasonic currency” is no longer applicable as Ethereum (ETH) revenue and destruction are both declining.
While L1 activity needed to increase, this activity was actually shifted to L2, which the community believed did not bring clear benefits to ETH.
@iamDCinvestor wants to re-emphasize the value of Ethereum (ETH) as programmable money, which he believes is the only narrative that matters.
This view is based on viewing ETH as high-quality collateral, so metrics such as revenue and destruction appear less important.
@ChainLinkGod countered that stablecoins have proven to be a more effective and widely used form of programmable currency than ETH.
Ethereum’s (ETH) narrative as “digital oil” is also waning as more Layer 2 solutions begin using their own native tokens to pay for gas fees.
Even developers are worried.
@0xdoug, founder of @ambient_finance , humorously but accurately likened Ethereum’s rollup-centric plans to a pilot who discovers mid-flight that the runway is too short, but insists that everything is fine despite all evidence pointing to the contrary.
To make matters worse, the pilot was drunk.
Seeing the rollup-centric roadmap constantly oscillating and adjusting at the economic level in Ethereum’s development is like being on a charter flight and having the pilot suddenly tell you that the main airport on the destination island is closed and he plans to land on a newly built runway.
You ask, “Are you sure the runway there is long enough?”
He replied: Sure, no problem.
However, you check and find that the runway is indeed too short. The pilot says, It doesnt matter, there is a grass field at the end of the runway.
But you check the map and see that the grass leads directly to the water. The pilot continues to reassure you, Dont worry, the plane will float.
However, when you look through the onboard manual, you find that it clearly states that you cannot land on water because the aircraft does not have the ability to float.
At this point, you begin to smell whiskey on the pilot’s breath. “We should turn to Nassau International Airport,” you insist.
The pilot was furious at the suggestion: Do you know how angry the passengers are going to be?! They signed up to go to that island. Theyve planned everything, paid for accommodation. Now we have no choice but to crash the plane.
Is it all over?
@llamaonthebrink believes that to evaluate the value of Ethereum (ETH), one needs to be socially aware, understand the mission of the blockchain industry, appreciate network effects, be skeptical of fiat currencies, and believe in an innovative Internet-native society.
ETH is different from traditional assets and is therefore difficult to define using traditional narratives such as “digital oil” or “tech stock.”
Its value lies in the ability to build an Internet-native sovereign economy that does not rely on intermediaries or traditional systems.
This requires foresight, understanding of network effects, and seeing possibilities that have yet to be realized.
Ethereum will define the future itself, beyond what existing frameworks can predict.
One might think this is difficult for baby boomers and traditional institutions to understand.
@mikeneuder provided a visionary example.
His reason for being optimistic about Ethereum is that it provides a decentralized, self-custodial, and permissionless system that can enable global value transfer and is not easily seized or censored.
This is core to its long-term value proposition.
Decentralization is not just an optional feature, it is crucial.
In a world where governments and corporations are able to control centralized systems, Ethereum stands out as a unique digital property rights system due to its neutral and censorship-resistant design.
While Bitcoin (BTC) is also censorship-resistant, as block rewards gradually decrease, Bitcoin will rely on transaction fees to incentivize miners, which may not guarantee its long-term security.
This is a sentiment that prominent researchers at the Ethereum Foundation such as @drakefjustin have mentioned in the past.
Ethereum
31 million ETH has been staked
Each ETH is worth $3,400
-> Total economic security value reaches 105 billion US dollars
Bitcoin
Computing power reaches 600 terahashes per second
$17.5 per hash
-> Total economic security value is $10.5 billion
Additionally, Bitcoin’s static nature of development makes adapting to changes more difficult compared to Ethereum’s flexible scalable rollup roadmap.
@adamscochran pointed out in the short term that Based Rollups can directly impact the monetization process of ETH by fundamentally changing the incentive structure compared to current Layer 2 designs.
This change could increase the long-term demand for ETH by 100x.
After completing the PoS transition and introducing the ETH burning mechanism, ETH was once considered to be developing smoothly.
However, the Ethereum narrative is currently at a standstill due to the continued low ETH price.
For me personally, it’s been very interesting to watch how the community discusses and tries to redefine the narrative of Ethereum.
I agree with @llamaonthebrink that to truly understand the value of Ethereum, more social awareness and a deep understanding of the industrys mission are needed.
However, when greed and speculation cloud our rationality, the industry as a whole tends to stray from its mission, and only when times get tough do we refocus on our original purpose.
We also noticed that discussions between the Ethereum Foundation and Layer 2 developers have become more active, and even Vitalik is increasing his interaction with the community.
This clearly shows that everyone is increasingly eager to get back on the right track of development.
However, as @0xdoug asked: Are you sure there is a long enough runway for this plane?
Even so, I remain bullish on the future (call it a holder bias, if you will).
