Ethereum's price is struggling around $3,000, with a decline of over 7% in the past 30 days, while Solana's on-chain trading volume has grown by 36% during the same period. The once king of public chains is facing an unprecedented identity crisis.
Under the spotlight of the cryptocurrency market in 2025, the 'eternal number two' Ethereum appears out of place. While Bitcoin continues to attract institutional funds with its 'digital gold' narrative and Solana captures the Meme coin craze with its 'on-chain Nasdaq' positioning, Ethereum is struggling under the triple attack of technical route disputes, ecological fragmentation, and shaken market confidence.
Frequent token sales by the Ethereum Foundation have sparked community discontent, and Layer2 solutions have been criticized as 'value extraction machines,' while Solana's Meme economy is forming a powerful siphoning effect. In the past seven days, Ethereum's on-chain trading volume has dropped by 38%, while its competitor BNB Chain surged by 112%, and Solana grew by 36%. Behind the data, a value reassessment concerning Ethereum's survival is unfolding.
01 Solana's lightning campaign in the Meme economy
While Ethereum is still striving to optimize its technical architecture, Solana has launched a lightning-fast raid on the Meme coin economy. Data from early 2025 shows that Solana has formed a crushing advantage in meme coin trading volume and user growth.
The siphoning effect of traffic and capital: Solana generated $71 million in base fees just between January 14 and 21; if contributions from ecological projects like Raydium, Jito, and Meteora are included, the total fees during the same period reached an astonishing $309 million. In contrast, Ethereum generated only $46 million in fees, and this gap reveals the harsh reality of capital flow.
The dimensionality reduction impact on user experience: Solana offers meme coin traders an almost instant and near-zero-cost trading experience due to its high throughput and low transaction costs. This stands in stark contrast to Ethereum's mainnet, where gas fees are high, and even Layer2 solutions struggle to fully bridge this gap.
Generational differences in community culture: Solana has successfully cultivated a Meme culture of mass participation, attracting a new generation of young users. Meanwhile, the Ethereum ecosystem is increasingly dominated by institutional investors and large capital, leading to a gradual weakening of retail participation.
'Solana has become the TikTok of the crypto space—fast, popular, and highly viral,' said one anonymous DeFi developer. This cultural difference is reflected not only in user growth but also in a chain reaction within the developer community, with an increasing number of new projects choosing to launch on Solana.
02 The double-edged sword dilemma of Layer2
The Layer2 solutions that Ethereum employs to tackle scalability challenges have now become pipelines for value outflow. Michael Egorov, founder of Curve Finance, sharply pointed out: 'L2 is more like a Band-Aid, a temporary solution rather than the foundation for a sustainable strategy.'
The cost of fragmented ecology: Liquidity islands form between various Layer2 chains, severely undermining DeFi's core advantage of composability. Users face friction when transferring assets between different Layer2s, leading to a fragmented overall experience.
The failure of the value capture mechanism: Rollup solutions have leaked most of ETH's value to L2 tokens and their operating companies. Base, backed by Coinbase, earns substantial profits, while Arbitrum's earnings go to the DAO, and the Ethereum mainnet only receives a trivial share of gas fees.
Self-doubt in the technical route: In March 2025, the Pectra upgrade increased the blob capacity from 3 to 6, further reducing L2 transaction costs. However, this also raises deeper questions: When the mainnet serves merely as a data availability layer, what is the core value of Ethereum?
Confronted with this dilemma, Ethereum Foundation researcher Justin Drake called on social media: 'Enable native Rollup technology to end the era of Layer2 division.' However, the solution is far from simple on a technical level, involving complex interest games and governance mechanism reforms.
03 The foundation's trust crisis and governance challenges
The frequent token sales by the Ethereum Foundation (EF) have become the last straw that broke the community's trust. Data from blockchain analysis company SpotOnChain shows that in just the first three months of 2025, the foundation conducted three ETH sell-offs, totaling 400 ETH, worth over $1.28 million.
A lethal blow to market confidence: Every sale by the foundation sends negative signals to the market, exacerbating downward price pressure. As of the end of March 2025, ETH's trading price struggles around $1,800, with a 30-day decline of over 9%.
Stagnation of governance mechanisms: Compared to the Solana Foundation's active market operations, the Ethereum Foundation has been criticized for slow decision-making and disconnection from the market. Its annual upgrade plan is seen by crypto investment firm Paradigm as a shackle that limits innovation: 'Accelerating Ethereum's development will enable more people to enjoy the convenience of permissionless innovation.'
Reserves and transparency crisis: Despite frequent sell-offs, the EF still holds 269,175 ETH, worth about $817 million. How to manage and use such a large reserve lacks sufficient transparency, raising ongoing community doubts.
In the face of surging criticism, Ethereum co-founder Vitalik Buterin acknowledged that the foundation is undergoing 'significant adjustments,' including leadership restructuring and increased transparency. However, whether trust can be rebuilt still depends on actual actions rather than promises.
04 The battle for life and death on the technical front
On the price chart, Ethereum is hovering on the edge of a key support level, and technical analysts show severe divergence regarding ETH's trend.
The historical seasonal pattern has failed: According to Coinglass data, ETH has shown a rising trend in February for six consecutive years, with an astonishing 46% increase in February 2024. However, this historical pattern was broken in 2025, as seasonal positive factors failed to reverse the downward trend.
The psychological battle of key support levels: Technical analyst Rakesh warned that ETH could drop to the $2,850 support level, and if it breaks, it could further plunge to $2,400. More pessimistic analyses suggest that falling below $1,800 could trigger mass liquidations, potentially leading to a waterfall decline below $1,000.
The critical point of the long-short battle: If bulls want to turn the tide, they must push the price back above the 50-day moving average (around $3,455) to potentially initiate a rebound to $3,745. However, the time window for the bulls is closing.
More concerning is that the ETH/BTC exchange rate has dropped to a four-year low of 0.30, reflecting a continuous decline in Ethereum's relative value within the cryptocurrency space. This performance not only affects short-term prices but also undermines Ethereum's position as a core pillar of crypto assets.
05 Value reassessment and the way out
When technological advantages cannot be converted into ecological dominance, Ethereum faces deep-seated challenges in value reassessment. Every breakdown of a key support level accelerates the collapse of the faith system.
The fatal flaw of unclear positioning: Bitcoin is positioned as 'digital gold,' Solana as 'on-chain Nasdaq,' while Ethereum's identity has become increasingly vague. As DeFi activity primarily migrates to L2 and the NFT craze wanes, the new narrative has yet to form, and Ethereum's core value proposition is being questioned.
The design dilemma of the PoS mechanism: After transitioning to PoS, the structure where stakers enjoy rewards while traders bear the gas burn costs has been criticized for exacerbating inequality. This mechanism design fails to address the issues of the traditional financial system and instead replicates its unequal characteristics.
Expectations and disillusionment of ETFs: The outflow of funds from the Ethereum spot ETF has continued, with a net outflow of $409 million in March 2025. Investors holding ETH through the ETF cannot participate in staking rewards and must pay management fees, significantly reducing the product's attractiveness.
The way out requires systemic reconstruction. On a technical level, Vitalik proposed forcing L2 integration by increasing data block fees by 200%, which could reshape the value distribution between the mainnet and L2. On the ecological level, the foundation's allocation of 50,000 ETH (about $165 million) to support the DeFi ecosystem is a key measure to revitalize the developer ecosystem. On the governance level, accelerating upgrade cycles and increasing decision-making flexibility have become urgent priorities.
Ethereum's predicament is essentially a microcosm of the paradigm shift in the crypto world. As Solana reconstructs traffic entry with extreme efficiency and Bitcoin ETFs become the top choice for institutional allocation, Ethereum's 'world computer' narrative reveals cracks in its real economic model.
The endpoint of value reassessment may not lie within the technical roadmap. In April 2025, when the Pectra upgrade will raise the staking cap to 2048 ETH, what the market sees is not technological progress but a lowered entry threshold for institutions and further marginalization of retail investors. This choice reveals Ethereum's difficult compromise between ideals and reality.
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