Author: Lane Rettig, former Ethereum core developer and former employee of the Ethereum Foundation; Translation: Jinse Finance xiaozou
I have been an active member of the Ethereum community for nearly eight years, working for the Ethereum Foundation in various capacities from late 2017 to mid-2019. Then and still today, I am deeply invested in the Ethereum project and community, both socially and financially, and I sincerely want Ethereum to succeed.
For a long time, Ethereum has been far ahead of the competition, and its technology and community have made it difficult for other projects to catch up. But this advantage has always been unstable - despite the impressive surface data (high market value, huge TVL, full blocks, etc.), the underlying problems always exist. Apart from DeFi and stablecoins, Ethereum has almost never had any truly useful applications, and users are basically limited to trading and speculation. Ethereum originally had a golden window of more than five years to consolidate its early achievements, but now this window of opportunity is closing rapidly, or perhaps it has disappeared completely.
Despite my deep commitment to the success of Ethereum and its community (or perhaps because of it), this is a particularly difficult topic for me to write about. On the one hand, I have so many things to say about the pros and cons of Ethereum’s current state, especially compared to the rest of the crypto ecosystem. Over the past eight years, I’ve spent more time thinking about this than perhaps any other topic.
On the other hand, writing this article requires an honest and critical attitude towards many current phenomena. After leaving the Ethereum Foundation in 2019, I had a strong desire to publicly criticize the Foundation and the entire Ethereum ecosystem, but I ultimately chose to remain silent—not only because the time was not yet ripe, but also because I needed time to settle and observe from a distance. Now is the time.
In addition, Ethereum's recent performance also contributed to my decision to write this article - multiple indicators show that it is in poor condition. As an asset, ETH has seriously underperformed the market recently, the ETH/BTC exchange rate is close to its historical low and has continued to fall for several years, and market sentiment is also depressed.
I’ve been talking to many of my fellow “veteran” friends who have been involved in Ethereum since I was a kid, and I’ve found that the mood in the community is lower than ever. I can’t find anyone who is actually bullish on Ethereum’s future these days. We’ve been through many market cycles together, through the governance crisis, the collapse of FTX and Terra/Luna, and the long bear market that followed, but the pessimism today is even greater than before. More worryingly, many veterans like me are uncomfortable speaking out about problems — which is itself a sign of the dire situation in Ethereum.
I still think Ethereum has a chance to turn around, but the chances are getting slimmer. Here are the problems and reform directions in my opinion. (Since there are many things to write about, this article will be the beginning of a series of articles, and the full discussion is expected to take several weeks.)
Question 1: Studying Worship
If we were to point out the biggest mistake of Ethereum, it would be to put research above applications. Since its inception, Ethereum culture, the foundation, and the core power class have sanctified research, sacrificing important dimensions such as application development, usability, and simplicity. In the Ethereum ecosystem, researchers occupy the center of the spotlight - they get top speaking seats and podcast interviews, and enjoy almost complete freedom within the foundation: they can choose their own research direction, tour the world, etc. Research-heavy projects receive the vast majority of funding. As a former Ethereum researcher, I admit that I enjoyed this preferential treatment at the time, but now I clearly recognize the harm of this worship.
There is nothing wrong with attaching importance to research. Research is indeed crucial. Without research, there would be no Ethereum today! Breakthrough research in the fields of consensus mechanism, virtual machine design, zero-knowledge proof, optimistic rollup, P2P network, data structure and database design, security mechanism, etc. has made Ethereum successful. Over the years, the Ethereum community has funded hundreds or even thousands of high-quality papers, giving birth to professional journals, conferences and research institutions. Most of these achievements are public products: open source code, free release of papers, and public lecture videos.
But the problem is that Ethereum is not just a research project. There are hundreds of billions of dollars of real assets and application value deposited here, and over-researching comes at a cost. Ethereum's designers are not application builders. They have never developed production-level applications on Ethereum, and most of them simply do not have the ability to do so. They lack awareness of the developer's dilemma: how difficult it is to develop secure and usable modern applications in Solidity, or the challenges of key management. They often ignore the knock-on effects of design decisions on the user experience and application layer. This recent tweet and its replies are a typical example.
While researchers are deified, product talent is relegated to a supporting role in the Ethereum ecosystem. There were no professional product managers in the foundation during my time, and it may still be the case today. There is almost no funding for product talent in the ecosystem. Most Ethereum project teams follow the foundation model and do not hire professional product people. And real product talent is deterred from the industry by the notoriety and difficulty of cryptocurrency development - even after so many years, the challenge of building usable products still exists.
The status quo could be different. Many of the user experience issues we take for granted—slow final confirmation, cold start problems, dedicated gas tokens, key management, etc.—are not necessary. We could have proactively designed a friendlier, easier-to-use Ethereum that makes it easier to build great applications. It’s not too late to change now. For example, the native account abstraction solution used by chains such as NEAR and Spacemesh solves problems such as cold starts while simplifying key management; some new chains use stablecoins as native gas tokens to reduce fee volatility; the final confirmation time of the new generation of public chains is greatly shortened, forming a positive cycle of user experience.
But these changes will be difficult today because they are deeply embedded in Ethereum’s design DNA. A complete solution would require a major innovation at the protocol level, but new projects have proven that it is feasible. Even more difficult than technical innovation is cultural change. Really solving the problem requires a fundamental shift: giving product talent the same respect as research stars. It also requires VCs to change toxic behavior and stop prioritizing funding for shit coin that can be quickly sold, and instead support truly usable products. And retail investors also need to stop speculating on worthless Altcoin.
In other words, this is a complex, multi-dimensional problem that involves a difficult coordination game. Unless we start over, the solution is unclear. But I still believe in the Ethereum community’s ability to solve coordination problems—as long as there is a willingness to reform, we will eventually find a way out.
Problem 2: Ideological Purism
My recent thoughts on the risks of ideological purism stem from my observations of Ethereum. We can rank blockchains such as Bitcoin, Ethereum, and Solana: one end is absolute purism, and the other end is thorough pragmatism. Bitcoin is the purest project in the world, adhering to the values of cypherpunks - freedom, personal responsibility, decentralization, anti-censorship, sound money and security. This adherence makes it slow to evolve, new features are difficult to add, and any upgrade requires a hard fork and may destroy the existing system. This also causes Bitcoin to always maintain the lowest transaction throughput.
Ethereum is more practical. Its transaction processing capacity is significantly higher than Bitcoin, which is why it has attracted the most developers for a long time - it is easier to build interesting applications on Ethereum than on Bitcoin. To do this, Ethereum sacrificed some of Bitcoin's values. A more complex virtual machine brings a larger attack surface, and there have been more vulnerabilities and attacks in history. In a sense, it is not as secure as Bitcoin. However, as the difficulty of node operation increases, the number of Ethereum nodes decreases relative to Bitcoin, and the degree of decentralization has also weakened - although the absolute value is still considerable.
Solana (and other new high-throughput chains) at the other end of the spectrum are extremely pragmatic and focus on delivering usable applications. Its transaction throughput far exceeds that of Ethereum, but at a heavy price: the overly radical technical solution has caused the network to crash many times and require manual restarts (developers call this "production environment testing"); the cost of running verification nodes is high, and the degree of decentralization is far lower than that of Ethereum; the system complexity even exceeds that of Ethereum, and the attack surface is larger. However, this obsession with pragmatism has attracted a group of product-focused builders, forming the Solana culture of "quickly delivering what users need."
It should be clear that there is no absolute right or wrong. Each project chooses a different value ranking, and this diversity is healthy. However, we must be aware of the cost of each choice.
As I wrote two weeks ago, Bitcoin and Ethereum-style purism carries significant risks. It severely limits the room for innovation at the base layer and in the ecosystem, slowing or even stalling change.
All of this is happening in Ethereum today. Despite its long-term leadership, Ethereum is clearly lagging behind in technology: its 12-second block time is far inferior to the sub-second confirmations common in modern smart contract chains; its minute-level final confirmation time is in stark contrast to the second-level confirmations of other public chains. The Ethereum ecosystem is not short of technical talent, and it is entirely feasible to achieve these upgrades - the key is what you want and what you are willing to sacrifice for it.
Multi-client implementation has become a stumbling block for Ethereum. Each protocol change requires 12 production-level clients to implement simultaneously, and any delay or rejection by any team will drag down the overall process. If the combination of consensus layer and execution layer clients is considered, each upgrade needs to test 36 interaction scenarios.
This is the main reason why Ethereum can only complete a network upgrade once a year, while public chains such as Solana can continue to iterate. Client diversity does help prevent a single culture and enhance the network's resilience to specific vulnerabilities or attacks, but Solana has proven that even networks that require manual intervention to restart are still economically viable. This is a choice made by the Ethereum community, and it inevitably comes with a corresponding price. The huge difference in Solana's upgrade strategy from Ethereum is two extremes - this comparison deeply reveals the essential difference between the two cultures.
Ethereum still has a window of opportunity to catch up, but if it continues to prioritize ideological purity (as it has always done), this opportunity will never be realized. The Ethereum community has never been willing to compromise on values such as decentralization, censorship resistance, or client diversity. The obsession with decentralization means that full nodes must be able to run on cheap commodity hardware, and other public chains have achieved greater breakthroughs in scale, throughput, and availability by moderately relaxing these requirements. Running a Solana validator node is more difficult than Ethereum, and it has fewer nodes. Whether Solana is decentralized enough is still unclear, and only time will tell.
In my opinion, Ethereum’s success so far is not due to its values, but has been achieved despite these values. After all, cypherpunk concepts such as decentralization and anti-censorship are not valued by most people. If Ethereum wants to maintain its market leadership, it cannot continue to be uncompromising in its values.
The Ethereum community is therefore faced with a difficult choice. It's about ambition and vision: Bitcoin doesn't need to innovate as fast as Ethereum because its vision is much more limited. Ethereum supporters need to ask themselves: Are you satisfied with the status quo? If the pace of innovation continues to slow or even slows down further, can you accept it? What is the ultimate vision for Ethereum? The answer is not yet clear, and the direction of the community is difficult to predict.
Of course, things are not black and white. The community should seriously consider more creative and rapid experimental solutions, such as deploying multiple experimental chains (see the relationship between Litecoin and Bitcoin, Kusama and Polkadot). The key is that we must start a serious discussion now, without any taboos, and break through the limitations of current thinking. Ethereum has successfully reinvented itself, and we can do it again - as long as we are really determined.
This brings us to the next topic.
Problem 3: Growth Dilemma
Ethereum is like a gifted but lost teenager, with unlimited possibilities but unable to do everything. The key factor hindering its development is its vague positioning - it is never clear what it wants to be and who it serves.
This state is almost innate, and is most directly reflected in the constantly changing narrative: from the "world computer" to the ICO platform, to the DeFi chain, the NFT platform, and then to the ultra-scalable global financial settlement layer, the "ultra-sound currency", and finally the data availability layer of Rollup. Perhaps the dramatic changes in the industry do require a narrative update, or it may be because the previous attempts did not really achieve product-market fit. But even if the early exploration period is put aside, it is time for the increasingly mature Ethereum to establish a clear vision - and this key breakthrough has not yet occurred, which is increasingly becoming a shackle for development.
I often feel that Ethereum is technology for technology’s sake, lacking an ultimate goal and reason for construction. Just like there is no North Star guidance (except for the values mentioned above), there is no specific product vision.
Ethereum’s technological breakthroughs have always been multi-threaded: initially adding a Turing-complete virtual machine to Bitcoin, then moving to proof-of-stake, and now expanding the base layer while maintaining decentralization—which is extremely challenging. But infrastructure must serve specific use cases, and Ethereum’s target application scenarios have always been vague.
The current "business model" (if it can be called that) is not working. After the shift to a "Rollup-centric roadmap" a few years ago, the execution layer and most innovations were pushed to various L2 chains, and the base layer focused on data availability. This is a departure from the original "Ethereum 2.0" roadmap of scaling through homogeneous sharding. Whether this decision was wise is controversial (will be discussed in a separate article later), but it is clear that the base layer cannot handle enough transaction volume on its own. As a result, transaction fees flow to L2 chains, and L2 pays data availability and settlement fees to L1.
In order to create the best data availability base layer, Ethereum later introduced blob space, which greatly reduced the storage cost of Rollup, but L1 fee income also decreased year-on-year. As economic activities increasingly migrate to L2, the base layer has failed to effectively capture its value. Although there are various improvement proposals, Ethereum is currently more focused on technical upgrades such as expanding blob space rather than solving economic model problems - as the supply of blob space increases and the price falls, this problem will only worsen. Moreover, after the emergence of competitors such as Celestia and EigenDA, data availability has become increasingly commoditized.
I believe that Ethereum should leverage its irreplaceable core advantage: building the most secure, decentralized, trusted and neutral basic settlement layer. This is the unique value that other public chains cannot replicate. Not all block spaces are created equal - just like the first lesson in marketing: Ethereum needs to find application scenarios that truly value its characteristics and provide premium services with a high-end positioning. Although I am not sure which applications they are, I have heard that many builders, including large AI projects, have said that they only trust Ethereum's settlement and dispute resolution functions. Applications involving large amounts of money or politically sensitive applications may also be the most suitable scenarios.
This is just one of several possible visions for Ethereum. Multiple competing visions are a feature of Ethereum. Choosing which vision is less important than choosing clearly — and then sticking with and maximizing the value of that use case. But given its messy, slow, consensus-driven decentralized governance, the path to getting there is unclear. Companies with CEOs are good at rallying product visions, and Ethereum has historically lacked that ability.
In short, Ethereum is trying to meet too many needs of too many people, using technology for technology’s sake but neglecting practical applications and value capture. It’s time to change, or suffer the consequences.
