In-depth analysis: Can Ethereum’s “transformation” drive prices to new highs?

Compiled by: ChainCatcher

Original Title: In Turbulent Times, Can Ethereum "Transform and Innovate" to Reach New Heights?

Despite recent geopolitical turmoil, Ethereum has become a market focus by bucking the trend through ETF net inflows and active capital markets amid overall market pullback. Meanwhile, the Ethereum Foundation has initiated financial policy reforms and internal restructuring, signaling strategic adjustments. How this move will impact Ethereum's medium and long-term trends has become a core discussion in the crypto field, indicating that Ethereum stands at a critical point of "transformation and innovation", with its potential to break through to new highs drawing significant attention.

In this Space session "Transformation and Innovation: Can Ethereum with Reversed Fundamentals Break Through New Heights?", we invited eight guests including Kiwi from OKX Ventures Research, Christine co-founder of Infini, famous E-guard Yinghao LIN, pepper, LEE CHAN co-founder of ChinaChic NFT, Aaron researcher from Bitget, Henry market head of Hash Epoch, and Cynic investment analyst from CGV to deeply discuss the collaborative driving forces behind Ethereum's rise, market fluctuations triggered by SharpLink's PIPE filing, and the dominant capital forces and potential breakthrough tracks in the Ethereum ecosystem, clarifying the real motivations behind on-chain trend changes and exploring early opportunities and value gaps in the new cycle.

Full version available for replay: https://x.com/i/spaces/1OdKrDRqElwJX

Question One: What are the main reasons for Ethereum's recent rise? Does it have the possibility of rebounding after the decline?

From the trading data, the current open interest (OI) has not reached the sentiment high point, but is rather a positive signal - with a high funding rate, there are still many long positions, indicating increased real market investment, and contract trading is mobilizing retail investor confidence. The short-term pullback from $2,800 is due to a black swan event impact, but Ethereum's upward cycle has been opened, and such retracements are actually opportunities for those who miss the pump.

Question Two: How do you view the stock price plunge after SharpLink submitted PIPE-related files? What insights does this event provide for future market development?

Pepper Chili: I believe the market may have over-interpreted the selling risk of the PIPE registration files - when Joseph Lupin (ConsenSys CEO) became the chairman of SharpLink Gaming's board, the company immediately disclosed the relevant documents, and this timing coincidence can easily trigger selling expectations.

Henry: Regarding SharpLink's stock price plunge, it may seem like a small company event on the surface, but what I sense is a deeper emotional change: traditional financial markets are becoming increasingly sensitive to on-chain data, especially contract and futures position changes on Ethereum.

This indicates a trend - on-chain information will become an important variable for off-chain assets, and policy, financial, or position dynamic disclosures will be viewed by the market as important risk signals. This is actually a key turning point for our Web3 platform.

Lee Chan: Regarding the reason for the pre-market stock plunge, I personally feel that SharpLink is more like a reversal and reverse hunting strategy, essentially possibly just for cashing out. Its substantive impact on Ethereum is not that significant, far less than MicroStrategy's ability to trigger substantial buying.

After all, "first is first", MicroStrategy as the pioneer has established market confidence, while these later companies are more imitators with limited influence.

Question Three: In the Ethereum ecosystem, what is the next explosive track? What early-stage projects are worth paying attention to?

Kiwi: I feel that after last year's Devcon, Ethereum's innovation has actually stagnated. After reStaking, no particularly outstanding new breakthrough has emerged. Although many optimizable concepts have been proposed recently, with progress in direction, these have been mentioned before, and there's still no truly implementable, transformative development.

As for market highlights, Arbitrum's recent Timeboost income performance is quite good and can be considered a rare bright spot. But overall, these are not enough to support a major market trend.

So in the short term, I believe Ethereum's technical side remains relatively flat, and a real breakthrough will still depend on new trends, such as RWA (Real World Assets), which would indeed be quite helpful to Ethereum.

Henry: In my view, there are three potential explosive tracks in the Ethereum ecosystem: first, protocols with on-chain autonomous earning capabilities; second, decision-making infrastructure; third, the service layer I'm currently researching that combines AI with smart contracts. These three directions share two common points: they are built on Ethereum's "second curve" and have verifiable on-chain income, which is particularly friendly to the current high-interest environment and has monetization potential.

For example, our platform Hash Epoch is connecting Web3 communities with content producers, allowing influential creators and KOLs to initiate topic predictions and share revenue with users, truly realizing "opinion as value, content as asset".

Question Four: In the Ethereum ecosystem, are people more interested in token price fluctuations or in future Ethereum ecosystem construction?

Aaron: Combining the previous question, there are three key macro trends in the crypto market worth noting: first, the GENIUS Act will be voted on in the House on the 18th, clearing obstacles for stablecoin compliance and attracting institutional funds; second, the Treasury Secretary predicts stablecoin market value will grow from the current $240 billion to $2 trillion by 2028, with RWA on-chain being the core engine for this growth, and traditional assets like stocks, oil, and gold going on-chain will bring massive incremental funds to the crypto market; third, although Solana is hot due to its MEME ecosystem, Ethereum is more likely to be the first choice for traditional institutions to deploy RWA due to its infrastructure advantages, such as Uniswap's UniChain potentially becoming the largest on-chain broker, and AAVE possibly evolving into the central bank of the Web3 domain, establishing the industry's basic interest rate system.

In the long term, these deployments will continue to consolidate Ethereum's fundamentals, especially the forward-looking exploration in the RWA track, which may become an important growth pole driving its development in the next four years.

Pepper Chili: I believe the key to reigniting Ethereum at this stage lies in the RWA trend, essentially solving the fund retention problem through "eight-character logic" - "cutting the head" through mechanisms like Staking and LST to achieve forced locking, "cutting the tail" by constraining liquidity through delayed satisfaction and penalty mechanisms, and "middle flow" relying on compound reward designs for capital retention.

The past DeFi nested model became ineffective, causing the underlying logic of the Ethereum ecosystem to lose support; split disk models failed due to lack of sustainable self-generating mechanisms. The rise of RWA provides an alternative path - by mapping traditional assets like US stocks and real estate on-chain, leveraging Ethereum's decentralized characteristics to become a channel for cross-border capital flow. Especially for the wealthy in underdeveloped countries, this method is equivalent to bypassing the traditional financial system, converting assets to dollars, thus bringing the crypto industry back to Bitcoin's early anonymous payment and hedging logic on the "Silk Road".

Cynic: I believe the core of the SharpLink event is that people don't buy its narrative. During a good market, even with cash-out operations, the market would be more tolerant; but now with an overall weak sentiment, the Altcoin sector is on edge, and any slight wind can easily trigger panic selling. This is the current dilemma of Altcoins. In comparison, Bitcoin has "uniqueness", and people are willing to treat it as a hedging asset. But Ethereum? I think the market confidence gap between it and other Altcoins is not as large as imagined.

Of course, Ethereum's biggest advantage currently remains DeFi and TVL, with no real competitors among public chains. But the issue is - if traditional finance truly wants to do RWA or on-chain finance, it may not directly access Ethereum, possibly choosing to create its own chain, which might not be a long-term positive for Ethereum.

However, at the current stage, Ethereum remains the biggest beneficiary of the stablecoin and RWA narrative. If looking at the Altcoin direction, it is still the most noteworthy main line target.