Ethereum was once seen as "an evolutionary product beyond Bitcoin" and an ideal country for programmable finance. But the reality is that its market value has long been far lower than Bitcoin, with weak growth, a weak credit system, and an unstable ecosystem. Even in the bull market driven by ETFs, it has been unable to deliver on its due value performance.
iShares' introduction to clients even stated that #ETH's role is to "Bet on blockchain adoption"
Can its current structural defects really be compensated by repeated ETH upgrades?
1. The consensus paradox of PoS: security comes from the center, but the center comes from a small number of wealthy groups.
Security depends on the rich holding coins and locking them up, rather than the energy cost of the physical world. This makes the system security highly dependent on human behavior, sacrificing the most basic "trustless" logic. If a consensus system relies on "good people holding coins" to maintain stability, it is itself an irony of the spirit of encryption. Besides, can good people accumulate so much wealth? Do you trust the majority of miners or Brother Sun?
2. Dual issuance system: PoW assets and PoS credit coins are mixed up
After ETH switched to PoS, the new coins had no production cost at all. But the old coins came from historical mining consumption. This created a fundamental cognitive confusion:
Old coins are “assets” that are backed by electricity and hardware.
The new currency is "credit" and can be issued out of thin air as long as it is pledged.
This is equivalent to a project that mixes the fiat currency issued by the central bank with gold assets and sells them together, and calls them all by the same name (ETH). If you are lucky, you will get the US dollar that has depreciated by half in 10 years, and if you are unlucky, you will get Zimbabwe. This is a disaster for investors, regulators, and market pricers.
Once the split logic is established, ETH must be distinguished into two assets rather than a unified asset pool.
3. ETH has no “scarcity” premium, but policy uncertainty
ETH does not have a strict upper limit on the total amount. The burning mechanism in EIP-1559 is intended to curb inflation in a nice way, but in reality only old coins are being burned, and new coins are being issued indefinitely and flowing into the market.
Those responsible for burning (users, gamblers, believers) and those responsible for issuing additional funds (capital) are two completely different groups of people, corresponding to the upper class and the lower class in reality. You let capital redefine greatness?
Ethereum governance can even modify the economic model at any time, and there is essentially no policy stability. The dynamic balance between staking mining and destruction cannot constitute a guarantee of scarcity.
Without the checks and balances of computing power, Ethereum needs a new check and balance. When the idea of voting based on the amount of coins held was first proposed, Vitalik directly opposed it because their team was in the minority. In fact, they could have designed it based on the AB share system of listed companies. Unfortunately, the team members were all technical people and were fooled by the capital.
4. Ethereum is not “centralized” and will never be “decentralized” again
Ethereum has a phenomenon of "implicit centralization" in its governance structure:
Protocol development is limited to the decisions of a very small number of core developers (Core Dev) meetings, and the foundation has absolute agenda power.
The threshold for node operation is extremely high, and staking 32 ETH is not affordable for ordinary users.
Large staking pools such as Lido and Coinbase control more than 50% of the voting rights, and they themselves are extensions of traditional finance.
This is not decentralization, it is a consensus simulator dominated by "technical oligarchs". In the final analysis, it is the consequence of cutting off both arms by switching from PoW to PoS.
5. ETH is a fee, not a currency
In the design of the consensus layer, ETH does not emphasize the "stored value attribute" like Bitcoin, but is defined as "platform fuel" and "smart contract execution fee". This directly leads to the loss of its credit structure as an independent asset.
No anchoring cost: After switching to PoS, ETH no longer has "electricity-hardware" as its value support, and relies entirely on network governance and node trust to maintain its credit.
No mandatory demand: ETH is only used to pay for Gas, and is being gradually diluted by Rollup and Layer 2 systems. The more prosperous the ecosystem, the less necessary ETH is.
No fiat currency peg: On the chain, stablecoins assume the main pricing function, not ETH itself. This directly negates the role of ETH as a "settlement unit". Users do not want to hold ETH, but only want to temporarily exchange it in to complete contract interactions, and then immediately exchange it back to stablecoins or other assets.
6. A hot ecosystem does not mean ETH is valuable: ETH does not enjoy a network premium
This logic is at the core of many people’s misjudgments:
“The Ethereum ecosystem is so large, ETH must be valuable.”
Wrong! The prosperity of the Ethereum ecosystem has not automatically fed back into the price of ETH. The reasons include:
A large number of DeFi applications use stablecoins as settlement units and have nothing to do with ETH.
Many L2s issue their own tokens and do not bind ETH for use as Gas.
If the smart contract project is successful, the profits belong to the project owner, not the ETH holders.
Ethereum is like building a city but not having the right to collect taxes. It’s like a government frantically giving away land for infrastructure construction, all the profits go to the real estate developers, and they don’t collect a penny in taxes, but only collect an “asset transfer” fee.
MEV capture logic bypasses ETH, and now more profits are in the middle layer (validators, sequencers, bots). ETH itself is just a circulation tool and has no tax collection ability.
Ethereum today:
It is not a store of value.
It is not a currency.
It is not equity.
It has no scarcity anchor.
It cannot capture ecological dividends.
It relies on oligarchs holding coins to operate.
There is ambiguity in regulation.
The fact that prices do not rise is the true vote of the market. @VitalikButerin you are the sinner of #ETH, a fool who was fooled by the "environmentalists" and allowed the capital oligarchs to seize the hard work of countless e-guards.
