Author: Todd Source: X, @0x_Todd First of all, congratulations on Ethereum's 10th anniversary! It's been exactly 8 years since I registered my first Ethereum wallet. There used to be a saying that humans undergo a large-scale cell replacement every 7 years. Indeed, from a cellular perspective, I'm no longer myself. Ethereum, however, remains Ethereum. My original Ethereum wallet is still intact, and even the little change I left in it back then has increased tenfold. At that moment, I was at home, writing and discussing Ethereum. At this moment, it's hard to imagine I'm still sitting there, discussing Ethereum. Let me start by talking about myself. It's no secret that I'm a devoted Bitcoin supporter, but I'm not a BTC maxi (which translates to something like a one-person fan. I'm not a one-person fan). I also like Ethereum, BNB, and Solana, and enjoy researching them. My first Ethereum wallet wasn't actually MetaMask, but an ancient one called My Ether Wallet. It was incredibly primitive, as every time I logged in, I had to upload a file called a keystore and then enter a password to unlock it before I could use it. I wanted to register an Ethereum wallet because I wanted to buy a CryptoKitties. Back then, two cats could have babies, and some cats were rare, so each cat had a different birth rate. This way, there would be an endless supply of offspring, which people could then speculate on. I first used MetaMask back in 2020. At that time, I was speculating on AMPL, the forerunner of algorithmic stablecoins. Its characteristic was that if the price rose above $1, it would print money for everyone. If it fell below $1, it would deduct money from everyone's balance, achieving the effect of a stablecoin by adjusting supply and demand.
The two wallets are actually the epitome of two eras. In fact, I roughly divide Ethereum into 4 eras:
Era 0 (2015-2016): The Birth of Ethereum
Era 1 (2017-2019): The ICO Era
Era 2 (2020-2022): The DeFi Era
Era 3 (2023-2025): The LST Era
Era 4 (2025-Present): The Asset Era
Era 1 Era: The ICO Era In 2015-2016, Ethereum had a single trick: smart contracts. At the time, this was a novelty, as other altcoins like Ripple and Litecoin didn't have it. Of course, smart contract development was also quite rudimentary. Until 2017, it was largely used only for issuing coins. After all, I was still using an inhumane wallet like My Ether Wallet. How could I possibly develop a DApp? However, being able to issue coins was enough. Previously, issuing coins required modifying the code (for example, changing "Bitcoin" to "Litecoin"), finding miners to support it, and constantly monitoring network stability—a daunting task. At least 80% of people just wanted a coin to speculate on, and didn't care much about its underlying mechanisms (even the narrative is becoming less and less important now. I regret not fully understanding this statement back then). Ethereum perfectly met this need, becoming an absolute supernova that year. I remember vividly that when China issued the 1994 crypto ban, the price of Ethereum was 1,400 RMB, and six months later, it reached 1,400 USD! Ethereum's recent high price is essentially a result of FOMO driven by supply and demand. Imagine participating in 1-3 public ICOs in your group chat every day, each requiring Ethereum, which is deposited into a smart contract and earns 3-100x the return. How could you not hoard some Ethereum? Of course, that Ethereum settlement was equally unexpected. I often share with my friends the story of SpaceChain and HeroChain's IPO failures. SpaceChain launches blockchain nodes into space, while HeroChain is a gambling blockchain launched by a supposed Southeast Asian casino owner. These two projects were considered the pinnacles of the ICO era. However, in early 2018, both underperformed their IPOs, marking the beginning of a wave of price drops. When everyone noticed that projects previously funded with Ethereum were cashing out, and that participating in ICOs with Ethereum was losing money, they naturally began to sell off Ethereum. Consequently, Ethereum plummeted to $80 per coin in 2019, a true trough of despair. I'm no exception. I'm not one of those true Ethereum warriors who maintains faith even when prices continue to fall. Writing is indeed a good habit, and it helps provide tools for self-reflection. I looked back at an article I published in March 2018, when Ethereum was around $400, during its low point. I also questioned Ethereum's value: if it could only support ICOs, then once the ICOs were closed, what else could Ethereum do? There were indeed some experts in the comment section at the time. One person named LionStar refuted the issue pointedly: "2018 is just the beginning of Ethereum's development. People in the Ethereum community know that Ethereum currently has no scalability or performance, and it's still early. Ethereum's grand vision will only take its first step in 2018. POS, sharding, plasma, truebit, state channels, swarm, zero-knowledge proofs, and a whole host of other things have yet to be applied. We'll see how Ethereum develops in five years. Also, the vast majority of cryptocurrency traders base their views solely on price. If the price goes up, they're in high gear, and if it goes down, they're out. This kind of thinking is not only terrible but also meaningless. Technology and development prospects determine true value, and price will eventually converge to true value." The dark humor is that, with the exception of PoS and zero-knowledge proofs, all of the above have failed. Of course, this is also Ethereum's most admirable aspect: its open framework allows diverse teams to experiment with a wide range of ideas, such as those mentioned above—sharding, plasma, truebit, state channels, and swarm. Most of these initiatives originate from the community, where everyone expresses their own ideas and works diligently on them. This embodies the spirit of the internet and open source software. Constant, free trial and error has made Ethereum what it is today. The entire Ethereum community is essentially driven by two main themes: technology, improving Ethereum's performance; and applications, building applications around Ethereum. Each has its own merits. After Ethereum's downturn, DeFi unexpectedly began to take off. The Second Era: The DeFi Era It all began in 2020 when Compound announced it would begin subsidizing depositors and borrowers. People were surprised to discover that Ethereum could actually create meaningful applications, beyond boring, visually appealing games like CryptoKitties. Furthermore, these truly meaningful applications were surprisingly superior to traditional ones. They offered cheaper borrowing costs and higher deposit interest rates. There was even a point where the "subsidy > borrowing interest" ratio caused electricity meters to reverse. People take it for granted now, but back then, people were shocked. Remember, other popular coins at the time were all just for the sake of innovation, like distributed storage, solar-powered cannabis coins, and game chains. Ethereum, however, had something that transcended traditional applications. It was truly impressive, like the village's first university student. ICOs weren't entirely a bubble; they brought new things. EthLend, the predecessor of AAVE, which we use every day, also originated from the ancient ICO era. Thus, Ethereum's rise from the ashes marked the official beginning of the DeFi era. DeFi also triggered shifts in supply and demand, as both Uniswap and Sushiswap required large amounts of Ethereum as limited partners, dramatically increasing demand for Ethereum. With Ethereum, mining anything and bearing a little bit of volatility, you can easily earn an APR of over 100%. Who wouldn't be tempted by such an interest rate? With the intensifying demand for Ethereum from DeFi, Ethereum first climbed to 4100 and then reached an all-time high of 4800 in 2021. This reflects people's (my own) fantasy that Ethereum could eat into traditional finance. However, unlike ICOs, Ethereum in 2021 faced a formidable challenge. DeFi was born on Ethereum, but the good news quickly spread to competing chains. Ethereum's competitors offered lower fees and faster performance. In the ICO era, the difference in gas fees wasn't significant, but in the DeFi era, the term "noble chain" is the worst advertisement for Ethereum, not a compliment. Fast forward to 2022, and Luna—it's hard to call it DeFi, because it was a Ponzi scheme from the start. Its sudden collapse brought down the market, taking with it FTX and 3AC, and also the DeFi craze in which these institutions were deeply involved. It was like a slap in the face, strangling the DeFi summer. Similar to the ICOs of the past, due to the reversed supply and demand relationship, people stopped participating in liquidity mining, and Ethereum began a long downward trend. The falling exchange rate against BTC, in particular, shattered the dreams of countless people. When DeFi thrives, Ethereum thrives; when DeFi declines, Ethereum will naturally struggle, especially when other chains are focusing on transaction fees below 1 cent. Why has Ethereum been vigorously promoting a Layer 2 strategy over a Layer 1 expansion strategy in recent years? I think you probably understand by now. This is truly a critical moment for its survival! Ethereum needed to act immediately and mitigate the exodus of DeFi, even at the cost of jeopardizing its mainnet's status. Consequently, a large number of Layer 2 (L2) projects emerged at this juncture. There were groundbreaking projects like Arb OP ZK, institutionally led projects like Base Mantle OPBNB, mother chains like Metis, novel ideas like Taiko, and application-driven projects like Uni. Ethereum didn't need a long implementation plan, but rather a very fast, simple, and immediate scaling solution that didn't hesitate to resort to drastic measures. The choice was Layer 2. Facts have proven that Layer 2 has achieved its intended effect, solidifying the EVM's reputation and preventing a large number of DeFi developers from leaving the ecosystem due to fee inflation.
Those funds and users left the ETH mainnet, but at least:
(1) They didn’t go to competitors;
(2) They didn’t give rise to more competitors.
Just imagine, if there was no L2 strategy, Coinbase would definitely launch its own chain. This is human nature. But with L2, at least in name, Base Uni and others still regard Ethereum as the "common master of the world."
As long as the EVM doesn’t fall, Ethereum won’t lose.
The third era: the LST era
Next is the third chapter of Ethereum, which is also the worst chapter in the market. Following the ICO era and the DeFi era, Ethereum has entered the LST era. With the Shanghai upgrade, Ethereum's transition to PoS has been a complete success. From a TVL perspective, Lido and EtherFi have risen, and countless ETH LSTs have sprung up like mushrooms after rain. Every new era bears the heavy imprint of the previous one. Just look at DeFillama. Currently, the top-ranked DeFi projects on Ethereum are essentially LSTs or LST-affiliated units. Source: DeFillama What are LST's subsidiary units? For example, revolving loans. EtherFi's revolving loans can easily achieve yields exceeding 10% on Ethereum (DM me if interested). However, loans require a place to borrow. Therefore, a large amount of TVL for AAVE and Morpho actually comes from the demand for revolving loans. So, although they are DeFi, I liken them to LST's subsidiary units. DeFi fueled the birth of LST, and LST has become DeFi's largest customer. A side note. Our company, Ebunker, was also founded around this time, on September 15, 2022, the day Ethereum's PoS merge was successfully completed. To this day, over 400,000 Ethereum are running on our nodes in a non-custodial manner, a decision I'm incredibly pleased with. After all, every Ebunker wants to contribute their own actions to safeguard Ethereum's security (I do this by running a node). Back to the point, if you're paying attention, you'll notice that I've been emphasizing that "dramatic shifts in supply and demand have impacted Ethereum's price." However, LST (including non-custodial staking) has failed to improve supply and demand. Lido's ETH interest rate has remained at 3% for a long time, while EtherFi's has been slightly higher, reaching 3.5%, but this is already the limit. Neither EigenLayer nor subsequent re-staking efforts have changed the fundamental nature of this base rate. But just as everyone hopes for a US interest rate cut every day, this 3% base rate has even magically suppressed virtual economic activity within Ethereum, a virtual nation. Ethereum's gas fees are beginning to decline (of course, this is also inseparable from the efforts of Layer 1 expansion and Layer 2 strategies), but economic activity remains sluggish. This mirrors two previous historical instances of supply and demand imbalance. Therefore, LST didn't become a summer phenomenon, but instead fell along with Ethereum. Because a 3% interest rate doesn't justify large investors buying Ethereum; at most, it can delay their sales. However, we should still thank LST, as many large investors have staked their Ethereum, which at least prevented a crash like the $80 price drop in 2019. The Fourth Era: The Asset Era. Fortunately, following Bitcoin, Ethereum also successfully listed on a US spot ETF, which gave Ethereum a brief moment of hype. In reality, this marked the beginning of Ethereum's fourth major chapter: the asset era. The journey from alternative assets to mainstream assets is a long one. As everyone watched the ETH/BTC exchange rate gradually fall below 0.02, Ethereum faced its third major challenge. In fact, everyone should thank that man, Saylor, for inventing the great micro-strategy game. Companies first buy Bitcoin/Ethereum, then use these assets to issue additional shares and debt, which in turn leads to buying more Bitcoin/Ethereum, issuing more shares and lending more bonds, and then buying even more Bitcoin/Ethereum. MicroStrategy's success in Bitcoin has inspired the Ethereum community. Sharplink, led by ConsenSys and represented by insider capital, and Bitmine, represented by traditional funds backed by Wood, are vying for the top spot in Ethereum's microstrategy market. These companies, along with a host of imitators, have successfully ignited the current resonant synergy between the US stock market and cryptocurrency. Yes, that's right, this time, the supply and demand relationship for Ethereum has changed again. Institutions are buying large amounts of Ethereum at the true market price. As before, the LST era also laid the foundation. Massive staking activity has locked up a significant amount of floating Ethereum liquidity, naturally contributing to the current FOMO (Fear of Momentum) associated with the cryptocurrency-stock market. Of course, this is also inseparable from the long-standing positive impression Ethereum has left on the industry and traditional investors. Vitalik Buterin hasn't flaunted luxury cars and villas, nor has he endorsed copycat scams. Instead, he continues to consider how technology, such as ZKVM, privacy, and L1 simplification, will impact the future of Ethereum. I've never even mentioned sbet or bitmine on Twitter. Ethereum's market selection and its ability to usher in this fourth era are a result of the goodwill and reputation built up over the years by both Ethereum and Vitalik Buterin. It can be said that Vitalik Buterin is a crucial part of my identification with Ethereum's values. Finally, as Binji mentioned, the Ethereum network has been running smoothly for 10 years, 3,650 days and nights, without any interruptions or maintenance windows.
During this time:
Facebook was down for 14 hours;
AWS Kinesis was frozen for 17 hours;
Cloudflare shut down 19 data centers.
Yes, Ethereum’s robustness is fascinating.
I hope, and of course I believe, that I will still be analyzing everything about Ethereum on Twitter in 10 years.
Happy 10th birthday, Ethereum!
Jixu
Jasper
Joy
Hui Xin
Brian
Aaron