Ethereum is declining and PVP is popular. I miss the summer of 2020

Jessy (@susanliu33), Golden Finance

Vitalik disappeared on X for more than 20 days.

In these 20 days, the price of Ethereum has repeatedly fallen below the psychological defense line of investors. On March 12, the exchange rate of ETH to BTC hit a new low, falling to 0.022676, a new low since June 2020. The exchange rate of ETH to BTC continued to fall, the giant whales of the ICO period fled, retail investors trampled, and Fud continued.

In February, a quarrel broke out in the Ethereum community. The community wanted Vitalik to lower his noble head and see what the current industry is playing. In the face of criticism, Vitalik said that he did not think that the current popular PVP was the best product of blockchain, and he and Ethereum insisted on making better products.

During the more than 20 days that Vitalik disappeared from the Internet, Binance's two founders, CZ and He Yi, took the lead in playing memes on X, and took advantage of the investment of Abu Dhabi investment institutions in Binance to set off a "white cloth market" of Meme on the BSC chain.

In this cycle, the Meme track is hot and PVP is prevalent, and crazy gambler emotions are rampant in the crypto community. In addition, a broader mood of confusion hangs over the crypto community, and the real innovation that can lead the industry to flourish has disappeared.

The industry is barren, and Meme has become the main narrative. People began to miss the summer of 2020 when DeFi was popular on Ethereum.

Formerly called "V God", now called "Little V"

In the past, people called him "V God", regarded him as a spiritual leader, and relied on him to point out the direction of crypto development. Now people call him "Little V" and ask him to "get out" of Ethereum.

The last time Vitalik became the focus of public opinion was in early February. At that time, the community was full of FUD about Ethereum. Facing people's doubts, rational suggestions, or emotional abuse, Vitalik finally responded on X, and the general idea of ​​the response was: he did not agree that the current PVP model was the best product, and he was pursuing a better product. In addition, in the face of everyone's requirements and responsibilities for the reform of the Ethereum Foundation, Vitalik also expressed his tiredness for the suggestions of people who knew nothing about the foundation.

Vitalik became the target of public criticism, which was unimaginable two years ago.

Groups often desire strong leaders and are eager to have an object they can worship in order to gain psychological support and guidance. This prompts them to be keen on creating gods, infinitely magnifying the advantages of a certain individual, and creating an omnipotent "god". Once this created "god" fails to meet the people's excessive expectations, the group's attitude changes extremely quickly and cruelly. They instantly turn from blind worship to fierce criticism, pushing the "god" off the altar, and venting their disappointment and anger through verbal abuse and slander.

Vitalik has completely experienced the process of being deified and deified by the crypto community. Once, in the crypto community, Vitalik's words and ideas pointed out the direction of the crypto industry. Vitalik is happy to express various ideas, such as SBT and cyber country in the early years, which are concepts proposed or strongly supported by Vitalik. It was also under Vitalik's vigorous promotion that these new concepts were sought after and practiced by project parties in the industry at the time, becoming a trend for a while.

Especially in a bear market, major project parties will try their best to lay out the tracks that will explode in the bull market. At that time, Vitalik was optimistic about Web3 social networking, and entrepreneurs flocked to it. However, after being popular for a short period of time during the bear market, they all died down.

The bull market is coming, but the directions that Vitalik "pointed out" in the bear market did not usher in a big explosion in the application level in the bull market. Chaos and confusion have become the feelings of most project parties.

There is no real innovation, no new narrative that can excite the industry, and the grand occasion of DeFi Summer that once happened on Ethereum has not appeared in the crypto industry again.

The infrastructure of the blockchain has been built, and the highways have been built, but there are no cars to run. The core contradiction of the current blockchain industry has nothing to do with infrastructure. It is what blockchain can bring to the world to change human life, or the world's products. What is the answer to this question?

If the answer is payment, that was the answer given by Bitcoin in 2008. If the answer is DeFi, that was the answer given by Ethereum in 2020. The most practical application in the currency circle can be said to be stablecoins. In various fields such as cross-border payments, it is truly changing the traditional world.

Apart from these, is there no more innovation in the blockchain industry? In this cycle, asset launch platforms on various chains are popular. This is just an innovation in the way assets are issued. The core of the casino has a new coat. Another track that is favored by everyone is the blockchain AI track. This track has raised a large amount of funds, but the bubble was punctured by the emergence of Deepseek. A more prominent problem in this track is that the main body of the narrative is still AI. Blockchain technology can help AI Agent obtain on-chain identity, build economic systems, etc., but it is always matching AI. This track is not a native track for encryption.

Under a wilderness, casinos are considered to be the best products in the encryption industry. Faced with many people's advice, Vitalik himself and Ethereum can devote more to the "casino" gameplay. Vitalik refused, "If I look into my heart, I will find something worth fighting for."

Vitalik also enjoyed the feeling of being dignified by people, and when Vitalik was pulled down from the altar, people also saw his side as a person. This side of being a person, in the eyes of some people, is stubborn, arrogant, and unwilling to listen to others' opinions. But it was also these characteristics that made him create Ethereum.

The passion that makes time go by quickly in youth can change the world

Jung once said, "When you are young, what do you do to make time go by quickly and make you happy? This answer is your pursuit in the world."

For Vitalik, what is worth fighting for has long been written in his childhood experience. Vitalik received a computer from his father at the age of 4. While other children played computer games, he was obsessed with Excel software and soon could use Excel to write automatic calculation programs. At the age of 7, he created a "Rabbit Encyclopedia" document full of charts and mathematical formulas, and was soon determined to have a talent for mathematics and programming. At the age of 10, his three-digit mental arithmetic speed was more than twice that of his peers. At the age of 11, he began to study mathematics, programming, economics and other subjects in advance in the "Genius Youth Class"...

Programming technology itself makes Vitalik happy, and using technology to change the world is his pursuit. Compared with some speculators in the currency circle, he is relatively conservative.

In 2018, Ethereum plummeted and was questioned by the community. Vitalik once warned not to let Ethereum become a "tulip" for speculators to speculate and make money. At that time, as now, Vitalik also considered leaving Ethereum, "Should I dorp Ethereum and work for Google".

Questions about Ethereum appear every time the price of the currency is low. Faced with the doubts and abuses of the community, Vitalik always thinks of "leaving".

Vitalik has always been persistent. His persistence in technology and his vigilance against "bubbles" have never changed. It is these persistences that have brought changes and innovations to the crypto world.

Looking back at the history of crypto development, the most important innovations that have led the development of the industry have mostly occurred on Ethereum, the "world computer", in the past decade: Ethereum has widely adopted smart contracts, providing a platform for the prosperity of innovative financial mechanisms such as DeFi such as liquidity mining, the construction of various second-layer solutions such as Rollups and Plasma, the practice of Dao's governance model, and so on.

At present, more and more major institutions such as the Trump family's DeFi project, Sony's Layer2, and Deutsche Bank's Layer2 are building Web3 applications and infrastructure solutions on Ethereum. The Ethereum ecosystem is mature and leading in terms of technical resource reserves, development team support, on-chain capital volume, client security, etc.

Moreover, Vitalik is not only using Ethereum to realize his technical ideals, he also places his social ideals on Ethereum, and is not limited to Ethereum. For example, the concepts he advocates, such as decentralization, resistance to censorship, and square voting, involve democratic practice, Internet structure, business and public welfare organizations. This makes his influence go beyond the crypto community.

Is Ethereum really hopeless?

Is there anything else to look forward to in Ethereum? The answer is yes.

In April, Ethereum will usher in the launch of the mainnet of the Pectra upgrade. This time, changes in the execution layer (Prague upgrade) and the consensus layer (Electra upgrade) are integrated. Pectra introduces 11 key Ethereum Improvement Proposals (EIPs) to enhance scalability, pledge flexibility and user experience. Overall, after this upgrade, the performance and stability of the Ethereum network will be improved at the technical level; at the economic level, the pledge economic model of Ethereum will be changed, which will affect the supply and demand relationship and market price of Ethereum; at the application level, it will attract more developers and users to enter the Ethereum ecosystem, promote the innovation and development of decentralized applications, and so on.

In the United States, the pledgeable Ethereum spot ETF may also be passed. In the first quarter of 2025, asset management company 21Shares submitted an application on behalf of the CBOE BZX exchange, planning to introduce the pledge function to its spot Ethereum ETF. In addition, Fidelity submitted an S-1 form for the proposed Ethereum spot ETF, which includes the pledge function. Grayscale has also applied to provide a pledge function for the spot Ethereum ETF.

The implementation of the Pectra upgrade is expected to shorten the unbinding period of Ethereum pledges, which was a major obstacle when staking was initially introduced for spot ETFs. The second upgrade may become a catalyst for the passage of pledged ETFs.

There is a consensus in the industry that one of the main reasons why Ethereum spot ETFs are less attractive is that the current ETFs do not have a staking function. The launch of the staking function will allow holders of Ethereum spot ETFs to receive rewards for staking Ethereum. After staking, investors will receive an annualized return of 3~3.5%. With the launch of the staking Ethereum spot ETF, the inflow of funds into the Ethereum spot ETF may be greatly increased, thereby pushing up the price of Ethereum.

Both of the above are substantial positives for the price of Ethereum that can be foreseen this year.

But another truth is that the changes that are worth looking forward to in Ethereum are just some improvements on a foreseeable path. These changes are just making the highway wider and flatter. This is not a disruptive industry innovation, or a groundbreaking product or application.

Ethereum's use cases have actually reached their peak. In this cycle, no projects with universal participation have emerged on the Ethereum main chain, and the price has not exceeded the previous high. The highest TVL still remains in 2021.

It used to be the first choice for building smart contract platforms. Now, when the infrastructure of the blockchain world has been fully developed, there are more convenient and cheaper platform public chains to choose from, and Ethereum is no longer the only one. In this cycle, public chains such as Solana, Sui, and TON have developed their own ecological characteristics. The leading Ethereum Layer2 such as Base has also made its own achievements.

Vitalik's demystification is a good thing for an industry. The industry has matured, Ethereum is no longer the only one, and more up-and-coming players can compete with it, which can also stimulate a richer ecology. With the establishment of a rich blockchain ecosystem, the importance of Ethereum in the industry will inevitably decline.

Vitalik once said in an interview with Initium Media, "My life is to be a bridge for everything." Since 2015, the Ethereum Foundation has spent more money on external grants than on internal operations. These grants have enabled Ethereum to connect more teams and promote the development of various projects in the crypto industry. Both Ethereum itself and Vitalik are laying the foundation for crypto.

And Ethereum and Vitalik himself should not bear the confusion of people about the lack of innovation in the entire industry.

"If you look inside yourself, you will find things worth fighting for too." Vitalik, who knows what he should fight for, will return again after a brief disappointment.

After questioning their own hearts, the confused and angry people in the crypto community will also make a choice, whether to stay as a "builder" and keep calm and create something new on the barren land. Or leave and go to the next outlet to continue to be a shrewd "speculator".