Why can't ETH rise? Do you really understand?

In the past two rounds of bull market, ETH was as popular as BTC and was simply a superstar. But this time, ETH obviously underperformed BTC. What's going on? Is it the rise of new public chains such as SOL? In fact, the deeper reason is the "vampire" problem that ETH is facing now: the L2 ecosystem is eroding the market value of ETH.

ETH's "highlight" is a thing of the past

Compared with the peak period of the last bull market, ETH's performance is not very good, and several key indicators are declining:

1. TVL (total locked volume): from 100 billion to 64 billion, a 40% decrease.

2. Protocol income: only 30 million US dollars per week, 500 million at the peak of the last round.

3. Number of active addresses: only 500,000 per day, less than one-third of the previous round.

However, ETH's market value has recovered to 70% of its peak. Judging from these data, ETH seems to be "fat", no wonder some people began to question whether it is overvalued.

L2: ETH's "vampire"

The rise of L2 has indeed brought a better trading experience, with lower GAS fees and faster speed. But at the same time, L2 has also dealt a fatal blow to ETH:

1. TVL was diverted: L2 sucked away 15% of the locked funds.

2. Active address exodus: More than 80% of ETH users have switched to L2.

3. Revenue plummeted: Because L2 reduced the demand for on-chain transactions, ETH's protocol revenue plummeted by 90%.

What's worse is that L2 itself is still growing on its own - tokens like ARB and OP have risen, with market capitalizations of tens of billions, which has completely diverted ETH's market attention.

There are greater hidden dangers in the future

If you think ETH has bottomed out, it may be a bit too optimistic:

1. BASE may issue coins: If Coinbase's L2 network BASE starts issuing coins, this will further snatch ETH's capital flow.

2. UNICHAIN ​​rumors: If big players like Uniswap also migrate to L2 to build their own chains, ETH's burning mechanism will be almost useless.

Moreover, ETH's market value model originally relied on GAS fee burning to achieve deflation, but the existence of L2 makes all this empty talk. Do you think L2 is a good helper for ETH? No, in fact, it is slowly draining the value of ETH.

Can ETH still rise?

The answer is that it can rise, but don't expect it to rise as much as before. The rise of L2 has turned ETH from a former giant into a "strong on the outside but weak on the inside" character.Do you think ETH can return to its former glory?