Chainfeeds Digest:
Facing the "parasitic effect" of the L2 ecosystem and the inflationary pressure on ETH, Ethereum is at a critical juncture, balancing decentralization and capital attractiveness, which will determine whether it can maintain its position as the public chain hegemon.
Source:
https://foresightnews.pro/article/detail/80092
Author:
YBB Capital
Viewpoint:
YBB Capital: The Pectra hard fork will introduce smart contract functionality into regular wallets, simplifying the development process and expanding the possible application range. Features such as social recovery and batch transaction processing make it easier to create user-friendly DApps, whether in DeFi, GameFi, or other applications, and users can expect more reliable and efficient DApps on the Ethereum network. However, the main dilemma facing Ethereum itself is the overly obvious "parasitic" effect of L2, with L2 chains attracting a large amount of DeFi activity, leading to a reduction in transaction fees on the Ethereum mainnet and an increase in the inflation rate of ETH. Although L2 chains are part of the Ethereum ecosystem, their centralized ordering and independent economic models have raised questions about the value of the Ethereum mainnet. In this cycle, many Ethereum holders are dissatisfied with the price performance of ETH, and many see the Pectra upgrade as a hope to change the rules of the ETH game, mainly in terms of improving staking and L2 scalability. Overall, the Pectra upgrade has brought a lot of changes to Ethereum, making wallet operations more flexible, allowing batch processing of transactions or sponsoring Gas fees, increasing the staking limit for validators, and accelerating withdrawal and network joining speeds, making operations more convenient. The increase in block capacity has made transaction processing faster and Gas fees more stable, and the significant increase in the staking threshold has improved the overall MEV transparency and increased the cost of MEV. Governance has also become more transparent and efficient. In terms of smart contracts, execution will be "cheaper," and cross-chain compatibility has also been improved. However, regarding the issue of Ethereum fragmentation and expansion, should the development path be towards a single high-throughput network, rather than relying on the aggregation of multiple chains to solve the problem? These challenges will also become a constraint on Ethereum's own development. The biggest advantage of this upgrade is to enhance the overall security and scalability of Ethereum, but the double-edged sword of EIP-7251 has the potential to reduce the operational load on the network by consolidating the number of validators and reducing the burden on large storage, but it has undoubtedly deepened the centralization of Ethereum, making it a complete playground for large investors and institutions. But whether it can rely on the huge 2048 ETH staking to cut off the access threshold for small investors and attract large capital investment, turning to Solana and Sui to embrace US capital and thereby drive up the price of ETH, remains to be seen. The current Ethereum seems to be facing a new dilemma, with narrative ability, centralized market manipulation, and decentralized PoS staking becoming the "new Blockchain Trilemma" problem.
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