Founder for turning Bankles’ “Ethereum Giant Ship”

Ethereum, the world’s second largest market capitalization, is at a crossroads. With a visionary approach, a merciless focus on long-term research and celebrated with bleeding innovation, Ethereum faces competitive pressure and internal anguish.

It appears that the Ethereum ships have run aground as Bitcoin dominates over 60% and ETH prices are at 70%, the highest ever priced three years ago. Luckily, that passionate community is coming together to get the course right.

In his article, Ethereum’s strategic pivotBankless’s David Hoffman explores the key challenges of Layer 1 and provides insights to spin the “huge ship of Ethereum.”

How Ethereum missed the course

The Ethereum’s distributed structure combines numerous voices and incentives to make achieving consensus a complex task. It was slow to respond to changing market dynamics, and urgency has grown and adapted within the community. However, identifying problems and tuning solutions is a long task.

Hoffman spoke with Ethereum Foundation researchers Ansgar Dietrich and Dunklaard Feist to outline some of the core issues facing the flame blockchain, including a lack of investment in Layer 1. However, many of the competing rollups that grow isolated and pose interoperability challenges that even the most solid ETH maxi have a feeling of dizziness.

Dietrichs and Feist argue that Ethereum should focus on scaling and improving the base layer, prioritize the user experience and follow a product-first approach that quickly adapts to a fast, competitive, threat-filled industry.

The vacuum of Ethereum leadership leads to a lack of clear direction and accountability for mother chain missteps, and the “ivory tower culture” brings to island research practices that suppress open collaboration and lead to operational inefficiency.

All of these challenges have left Ethereum off course. As Cryptoslate recently reported, its market advantage has sunk to its five-year low, falling below 8% as alternative blockchains attract users with lower fees and faster trading. Even as layer 2 solutions improve efficiency, they are pulling activity away from the mainnet, reducing network revenues, and threatening Ethereum’s competitiveness.

Strategic Reorganization – Where Ethereum goes from here

Despite the undesirable panorama, Hoffman and his unbanked guests remain optimistic about Ethereum’s future, presenting a set of strategic pivots to activate the network.

One of the major initiatives is aggressive layer 1 scaling, with plans to increase gas limits by 10 times over the next two years. The short-term upgrades cover a 36 million to 100 million petrol increase by the end of 2024, but upcoming Glamsterdam Hard Fork aims to boost this to another 300 million.

By integrating a ZK-based system (ZKVMS), it ultimately expanded layer 1 capacity by 100 times without compromising decentralization, transforming long-term research ambitions into short-term engineering goals.

In addition to these technical upgrades, the ETH community has shifted from protocol-first to product-centric thinking, emphasizing user experience and developer support. Leadership and coordination are also attracting new attention, and the Ethereum Foundation has appointed new co-executive directors, Tomasz Stańczak and Hsiao-Wei Wang, providing stronger direction and internal cohesion.

Ethereum is also working to standardize interoperability and encourage deeper integration between Layer 1 and Layer 2 solutions, positioning it as a service provider for L2S. Recognizing the need for greater urgency, the network is also embracing short roadmap cycles.

After the Pectra upgrade

The upcoming Pectra upgrade, scheduled for May 7th, is the focus of these changes. Pectra is committed to enhancing wallet capabilities, facilitating transaction costs, improving overall scalability, reviving on-chain activity and restoring trust in the ecosystem. Industry leaders believe these improvements could potentially catalyze new growth and potentially bring Ethereum back to $3,000.

Further upgrades such as Peerdas and Fusaka are planned to increase data availability and reduce L2 transaction costs. However, as reported by Cryptoslate, Ethereum’s ability to support a thriving L2 ecosystem depends on continuous technological advances.

Hoffman emphasizes that the Ethereum Foundation’s new leadership is just part of the equation. The broader ETH community must also adapt, update messaging and align its vision with the platform’s evolving strategies.

As he says:

“Ethereum is a big tent that holds space for a variety of voices.”

The challenge for the future is to leverage that diversity and guide ships towards a more scalable, easy to use, and competitive future.

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