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In early 2025, the spotlight of the crypto market once again focused on Ethereum and its underlying Ethereum Foundation (EF). However, this time it was not due to a new technical breakthrough, but rather the turmoil caused by internal governance crises and external competitive pressures. The exposure of internal conflicts within the EF, the sharp decline in on-chain data, and the relentless pursuit of competitors like Solana have plunged the once-dominant blockchain into an unprecedented crisis.
This is indeed a critical moment for its survival.
Ethereum's future stands at a crossroads, and this storm has not only exposed its shortcomings in technical roadmap and ecosystem governance, but also prompted the industry to reflect on the next steps for this benchmark project. Caught in the pincer of internal and external challenges, can the king regain its footing and find a way out? The answer remains uncertain, but time waits for no one.
The Source of the Storm: Governance Crisis in the Foundation and Community Outrage
From Power Struggle to Community Trust Crisis
In recent weeks, discussions around the Ethereum Foundation have reached a boiling point. From the inefficiency of the leadership to the lack of transparency in financial expenditures, the community's discontent has been steadily rising. Aya Miyaguchi, one of the core leaders of the EF, has become the target of criticism. Her remarks on "anti-competitive culture" have been interpreted as a lack of courage to address market competition, and have been criticized as indifference to Ethereum's future development.
Vitalik Buterin himself has publicly stated that he is "undertaking a major overhaul of the EF's leadership structure".
The bigger problem lies in the Foundation's governance structure. Ethereum co-founder Vitalik Buterin has had to personally intervene and announce a comprehensive reform of the EF's leadership. Given the high concentration of power, this decision has sparked new controversies: Should Vitalik himself also be held accountable for the EF's problems? Is a more transparent and flatter governance model the better solution?
The Community's Call for Reform: Voices from the Ethereum Ecosystem
Important figures in the Ethereum ecosystem have publicly proposed reform suggestions for the EF.
Among them, the views of Synthetix founder Kain Warwick and Curve founder Michael Egorov are particularly noteworthy:
Kain Warwick's Proposal on Economic Incentives
Kain argues that Ethereum should more actively leverage Layer 2 revenues to enhance the value of ETH. He points out that Ethereum has a huge advantage in negotiating with Layer 2 solutions, and can require them to use a portion of their revenue to repurchase ETH, thereby forming a value feedback loop.
Michael Egorov's Challenge to the Roadmap
Egorov's stance is completely opposite. He bluntly states that Ethereum should abandon the expansion roadmap of Layer 2 and instead focus on improving the performance of Layer 1. He likens Layer 2 to "a band-aid", believing that this strategy cannot fundamentally solve Ethereum's high-fee problem.
Aave's 12-Point Reform Proposal
Aave founder Stani Kulechov's reform proposals are more comprehensive: from reducing annual expenditures, optimizing the employee structure, to diversifying revenue sources, his suggestions cover almost all of EF's core issues. He specifically mentions that EF should significantly reduce non-technical positions, while using staking rewards and diversified investments as the main sources of revenue, completely breaking away from the dependence on direct ETH sales.
On-Chain Dilemma: Ethereum Ecosystem's Endogenous Challenges
Declining On-Chain Data: Continued Decrease in DApp Activity
According to DappRadar data, Ethereum's on-chain transaction volume has decreased by 38% in the past week, reaching only $36.5 billion.
In comparison, BNB Chain and Solana have achieved 112% and 36% growth respectively. Particularly, Solana, with its efficient and low-cost on-chain environment, as well as the push of the memecoin craze, has rapidly encroached on Ethereum's market share.
Specifically, Ethereum's core DApps, such as Balancer and Morpho, have seen a 65% drop in trading volume; Uniswap has also not been spared, with a 40% decline. The root cause is Ethereum's high transaction fees (currently $5.50) that continue to deter users.
Layer 2: A Lifeline or a Structural Problem?
In recent years, Ethereum has focused its expansion strategy on Layer 2 solutions, such as Arbitrum, Polygon, and Optimism. However, this strategy, while reducing transaction fees, has also weakened the economic benefits of Layer 1. More seriously, this layered expansion model may gradually alienate users from the mainnet, leading to a decline in Ethereum's ecosystem control.
Although Layer 2 solutions have shown some performance in terms of Total Value Locked (TVL) and transaction volume, their ability to truly enhance Ethereum's competitiveness remains questionable. Solana's single-layer architecture has advantages in efficiency and user experience, posing a strong challenge to the Layer 2 model.
External Pressure: The Rise of Solana and Market Fragmentation
Solana's Market Offensive: From Technical Competition to the "Trump Effect"
On January 18th, a shocking event occurred in the crypto market - former US President Donald Trump officially endorsed a record-breaking token called the "Trump Official Coin" (TRUMP). This news quickly sparked a market frenzy, becoming a key catalyst for the surge in Solana's on-chain transaction volume.
Data shows that in the past week, Solana's on-chain transaction volume reached $118.6 billion, more than three times that of Ethereum.
Solana's Total Value Locked (TVL) has also grown by 29% in a week, reaching $11.2 billion, further compressing Ethereum's market space.
This event-driven growth not only highlights Solana's keen responsiveness to memecoins and hot events, but also demonstrates how its efficient and low-cost on-chain environment can fuel market hype. From technical competition to event marketing, Solana's market offensive is gradually eroding Ethereum's territory, further widening the gap between the two in terms of user experience and trading activity.
Ethereum's Shaken Market Position
Although Ethereum still maintains a leading position in TVL, its market dominance is facing severe challenges. Solana's growth shows that an efficient and low-cost on-chain environment is attracting more developers and users, while Ethereum's expansion solutions are struggling to balance performance and decentralization. For investors, this contrast further highlights Ethereum's shortcomings.
The Way Forward: Ethereum's Future Direction
Governance Reform: Rebuilding Trust
The internal reform of the EF is not only an urgent task, but also the key to Ethereum's future development. Vitalik Buterin's "sole decision-making power" is a temporary solution, but in the long run, the EF must build a more transparent and democratic governance mechanism. Whether it's introducing community representatives into the decision-making process or optimizing the financial expenditure model, rapid progress is needed.
Strategic Adjustment: Balancing Layer 1 and Layer 2
Ethereum needs to re-examine its expansion strategy. Relying entirely on the Layer 2 expansion model may be short-sighted. The EF should consider improving Layer 1 performance while using incentive mechanisms to attract more users back to the mainnet. Additionally, in supporting DApp developers, the EF needs to provide stronger resources and technical support to counter the offensive of competitors like Solana.
Market Competition: Enhancing Ecological Resilience
When facing the challenge of Solana, Ethereum cannot rely solely on its technological advantages, but also needs to seek breakthroughs in the market and user experience. Launching more flexible development tools, lowering the threshold for on-chain interactions, and establishing more partnerships with enterprises are all possible directions.
Conclusion: Choices in the Storm
Ethereum's current crisis is not only a problem for the ecosystem, but also a severe test of its status as an industry benchmark. From governance turmoil to market competition, Ethereum is facing unprecedented challenges. However, history has shown that true benchmarks often achieve self-breakthrough in times of crisis.
Vitalik once said, "Ethereum is not just a technology, but a philosophy." If this philosophy cannot withstand the challenges of reality, it will lose its cohesion and appeal. Whether the EF can complete the reform in the storm, and whether Ethereum can regain its dominance in the emerging market, will determine the future height of this project.
Perhaps, the real revolution has just begun.
