Has Ethereum lost its direction?

Author: Ganesh Swami Source: coindesk Translation: Shanolu, Golden Finance

Is it possible for Ethereum to lose its focus and end up achieving nothing by trying to meet everyone's needs? Ethereum needs to refocus on its original vision - to become a global computer, says Ganesh Swami, co-founder of Covalent.

Since its launch in 2015 with the codename 'Frontier', Ethereum (ETH) has come a long way, evolving from a grand idea into the foundation of thousands of decentralized applications today. However, with blockchains like BTC and Solana competing for Ethereum's developers and user base, the Ethereum ecosystem has become uncertain and lacking a clear direction, gradually deviating from its original goals. Even the value of Ethereum's token seems somewhat lackluster. The price of Ethereum's token has yet to surpass the historical high of $4,700 set in 2021.

This raises a question: Has Ethereum lost its direction? If so, how can we get it back on track?

**As Confucius said, "One who tries to do two things at once will fail at both." While chasing faster execution speed like Solana, Ethereum has also tried to compete with the concept of "hard currency" of BTC, and has gradually forgotten its original intention of becoming a "global computer." Péter Szilágyi, the head of the ETH team, said, "ETH has lost its way." Even the status of being a "ultrasound currency" has been questioned, as the inflation rate of ETH has reached 0.74%, which is related to the decrease in trading activity and the drop in ETH burning rate. Although some people advocate that ETH should maintain its deflationary nature, we must remember that being an "ultrasound currency" has never been the goal of ETH.

Progress of Ethereum's Infrastructure

Ethereum is not just a currency, and it has never pursued the highest TPS (Transactions Per Second) or the lowest gas fees; its mission has always been to build a truly decentralized future. Vitalik Buterin and other co-founders created Ethereum to make it a "global computer" - a global network composed of thousands of computers on which anyone can build decentralized applications at any time. However, in the pursuit of accessibility and interoperability, the ecosystem has been distracted by various emerging trends and lost focus.

As the price falls below $2500, many people think that the poor performance of Ethereum (ETH) is related to the applications built on its network. Many dApps (Decentralization applications) developed on Ethereum often only get short-term hype, but due to clumsy user interfaces and underdeveloped platforms, the usage of these applications is limited and user growth is slow. Furthermore, these applications often only attract the same user base scattered across different Layer 2 (L2) networks. Without practical applications, Ethereum will not be able to achieve its goal of becoming a global computer.

The primary goal of Ethereum should be based on a strong infrastructure, not applications. Decentralization computing and the development of second and third-tier networks that support Ethereum are actively underway, which indicates that the infrastructure of Ethereum is constantly improving. Even enterprises are now starting to favor permissionless networks like Ethereum over private enterprise networks because development on permissionless chains has become cheaper.

But even with these advancements, the improvement speed of Ethereum is still relatively slow. Currently, it is in the middle stage of the expansion roadmap, which is a relatively flat period. Technologies such as Merkle Trees, zkSTARKS, account abstraction, and the integration of different L2 solutions are gradually being implemented.

There is a need to reduce short-term thinking. Like Bitcoin, Ethereum (ETH) will eventually emerge from its current seemingly inactive period. Ethereum is in its 'lightning moment' and needs to abandon the narrative of being a 'supersonic currency' and stop trying to catch up with Solana. For those who follow its progress, Ethereum has a clear path for correction. For example, we have yet to see how people are using 'Blobs' beyond being a storage space for aggregating fraud proof challenge windows.

Future Outlook

After the Dencun upgrade in March 2024, Pectra will become the next major upgrade of the Ethereum protocol, expected to be launched by the end of 2024. There is also a 'Purge' upgrade on the long-term roadmap of Ethereum. This upgrade will help Ethereum keep up with other blockchains and reduce the cost of participating in the network by simplifying the protocol through cleaning up old historical data and eliminating technical debt when handling the influx of activities after the chain is more widely adopted.

Although the removal of historical states has brought many benefits, it also exposes the risk of ETH becoming a chain centralized by entities that monopolize data, making ETH more like a billboard and reducing its trustless nature. This issue hinders the development of the next stage of the "global computer," as downstream activities such as multi-agent AI systems and decentralized computing cannot scale without data. This problem needs to be addressed with a solution: long-term data availability of decentralization.

Currently, Ethereum is indeed in the mid-term stage of its expansion roadmap. However, Ethereum can get back on track by shifting its focus to infrastructure, which is the key to enabling the network to truly fulfill its role as the "global computer." With Ethereum completing its roadmap in the coming years and achieving Decentralization computing, the global computer will run smoothly on a powerful global infrastructure.