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It feels like the things that got me into web3 are not considered as sexy anymore. And I am asking myself how we came here.
(Not going to put this one to be rewritten by ChatGPT, if it is imperfect I couldn‘t care less)
My story isn’t particularly remarkable. As a teenager in mid-2017, I invested all my saved pocket money into $ETH, which I unfortunately lost due to my own mistakes in 2020. I didn’t participate in ICOs, the DeFi Summer, or the NFT craze. Since I began building things gradually in 2022, my belief in $ETH has only grown stronger. To this day, I don’t engage in trading or flipping; I’ve only been buying since 2021. Despite (and the last few weeks: in spite of) the current narrative on CT, I still believe I’m making the right decision. And I feel like this position needs to be more proactively communicated and defended in the Twitter trenches.
First, to clear things up:
What is wrong with our space?
- ETH price action compared to USD, BTC and (even) SOL is the starting point of the negative narrative towards $ETH (and I am convinced that it is not vice versa).
- The fails of Ethereum (which are often temporary and very subjective) are ever so salient on CT in comparison to its successes.
- The orange coin, getting attention from large-scale investors and nation-states it does not deserve.
Gambling and putting things on-chain that in no world need be on-chain is normalised (yet again).
Where do I think the issue is coming from?
1. The CT establishment in a broader sense is underinvested in ETH. Having gotten into ETH early enough has made those involved (too) well off by now to bother with the narratives on this app. At the end of the day, those who are the most visible in CT need to pump their bags, and they are clearly more likely to make quick wealth off their [insert altcoin ticker] bags than off ETH.
2. The outside interest in web3 has locked in perhaps too much capital, which has perverted the market into believing that we do need 150+ Ethereum layer 2s, so many generalised/use case-specific L1s and so many other things that are only destined to go down in oblivion. It almost feels like some projects don‘t even have to bother making revenue or bringing real value to raise a seven-digit sum.
3. Problems of Ethereum are real and serious, there‘s no question. Wrong focus was being made for way too long on things like the “Ultrasound Money” thing. I loved the analogy @samkazemian made at their Bankless podcast a couple of weeks ago:
“And he's like [talking of Justing Drake]: “You can think of ETH as a big business. You can extrapolate the ETH asset discounted cash flows. And you can imagine a world in five, 10, 15 years where there's hundreds of billions of dividends happening through this burn [EIP-1559]. And then you can extrapolate ETH having that.” He's basically saying, let's just trade it at the floor. Let's just everyone coordinate to talk about the floor of ETH.
The way that I imagine if people only talked about the industrial use case of gold in circuit boards and electronics, and that would suck, right?”
Instead of pushing things like scaling the mainnet, we were jerking off on things like ultrasound.money and ethismoney.xyz.
Is it really so bad though?
No. At least not anymore.
To problem 1: The shift in the narrative and the price action has ignited the discussions on Ethereum evangelism led by the OGs, who have got lots to say but were dormant (at least publicly). The FUD towards Ethereum is reaching or has already reached its ATH, while all those yapping to dunk on Ethereum are doing so (seemingly) in revenge for similar situations they had previously (e.g., the sub-$10 Solana). I think many people understand the following thing: Ethereum is not the fastest in chasing the newest tech or changing things in general, but when the ship turns around, you know it is coming for you.
To problem 2: There’s still A LOT of money being invested, with several huge alt-L1 deals announced lately. It doesn’t look like there’s a huge shift here (yet), but there is a hope that things will change after the Movement case.
To problem 3: There is a shift here already. Ethereum is waking up, and everybody feels it. @VitalikButerin is talking about changing and essentially simplifying both the consensus and the execution layers in his latest articles and posts. New Ethereum Co-EDs, @Etherealize_io coming up, and so many more things. Ethereum knows perfectly well where its weaknesses lie and is going to deliver very soon. That, plus post-Pectra blob scaling, is not going to leave any air to alt-L1s.
So, if it is not so bad… is it going to be gud soon?
Yes, I think so.
1. ETH is at prices it was at early 2021 and through the 2022-2023 bear market.
2. At the same time, Ethereum TVL in USD terms is 2.5x up from where it’s been during the bear market. RWAs will be primarily issued on Ethereum.
3. Ethereum Stablecoin supply is at its ATH.
4. While Ethereum mainnet has got roughly the same number of users as when ETH was at $4700, Ethereum L2s have broken their ATH in user count last week (Ethereum L2s ARE Ethereum and will get even more integrated with time, period). Ethereum L2 are also already processing 15x more TPS than Ethereum.
Provided the price follows these fundamentals and the current change in the social layer, those who faded Ethereum will look stupid very soon.
The ship is already turning.
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