‘The Fight for Ethereum’s Soul,’ a Cointelegraph documentary

Ethereum went unrecorded 10 years ago, bringing programmability and composability to a technological innovation sparked by the advent of Bitcoin successful 2009.

But what does the aboriginal of Ethereum hold? It’s a loaded question that is incredibly hard to reply fixed the complexity and decentralized quality of the world’s pioneering smart-contract blockchain protocol.

The documentary features respective founders, CEOs and builders successful the Ethereum ecosystem including Ethereum Foundation (EF) co-executive manager Tomasz Stańczak, Polygon co-founder Sandeep Nailwal, Ethereum France president Jerome de Tychey, Figment co-founder and CEO Lorien Gabel, Dune Analytics co-founder and CEO Fredrik Haga, Polygon Labs CEO Marc Boiron, YAP Global co-founder and CEO Samantha Yap and Base caput of merchandise Tom Vieira.

The documentary was directed and produced by Cointelegraph’s caput of multimedia Gareth Jenkinson, with elder shaper Celine Tan.

A decennary of dominance nether threat

Ethereum has dramatically evolved implicit the past decade. The blockchain managed to execute a alteration successful statement algorithm, often likened to replacing the motor of a car driving astatine afloat velocity connected a highway.

The displacement from proof-of-work to proof-of-stake fundamentally changed the mode the protocol works. Ethereum parted ways with Bitcoin’s proof-of-work attack to consensus, rooted successful computationally and energy-intensive hashing, to a skin-in-the-game strategy that requires validators to involvement ETH tokens to support the web and reap rewards.

While Ethereum initially provided fantastic functionality, it yet encountered the aforesaid problems arsenic the preeminent cryptocurrency protocol. Its basal furniture concatenation simply could not service the needs of the increasing fig of users, applications and services that acceptable up connected its network.

Source: Ethereum.org

To alteration the quality to process infinitely scalable transactions, the Ethereum assemblage adopted a furniture 2-centric attack to scaling. Execution, from transactions oregon plus creation, was shifted to a abstracted infrastructure layer. These layers usage unthinkable advances successful cryptography, similar ZK-proofs, to taxable trustless grounds of transactions and enactment to Ethereum’s basal layer.

Related: Ethereum turns 10: Here’s however its booms and busts shaped history

This brought scale, velocity and outgo reductions to furniture 1, but an inevitable effect was the fragmentation of liquidity and shifting incentives for validators. Fees dropped connected the basal layer, which remains a halfway inducement for Ethereum validators to support the network.

Meanwhile, the superior execution environments of furniture 2s began to propulsion liquidity from Ethereum’s basal layer. In 2024, grumblings of discontent began to surface.

Prominent voices called for the EF to intervene and suggest changes to the protocol that ensured the worth of ETH continues to emergence portion maintaining the advances successful UX and UI that furniture 2s had provided.

Changing of the guard

In 2025, the EF made important changes to its organisational structure. Tomasz Stańczak and Hsiao-Wei Wang took up a dual relation astatine the apical of the Foundation, reporting to a braintrust led by Vitalik Buterin.

Pectra, Ethereum’s latest web upgrade, deed the mainnet successful May. It was the astir important alteration to the protocol since the Merge successful 2022.

Combining the Prague execution furniture and Electra statement furniture hard forks, Pectra introduced 11 Ethereum Improvement Proposals (EIPs) to amended scalability, idiosyncratic acquisition and staking efficiency.

Source: Ethereum.org

Pectra builds improvements made by the 2024 Dencun upgrade, which famously introduced Blobs done EIP 4844, known arsenic proto-danksharding.

Blobs provided a caller mode for L2s to station transaction information connected the L1. The interaction was dramatic; L2 transaction fees dropped by 90%.

Related: Ethereum transaction volumes spot year-high amid SEC staking drama

An unavoidable effect of this upgrade was that L2s nary longer paid immense fees to settee connected Ethereum. According to Dune co-founder Fredrik Haga, this was a technological boon, but an economical drawback for L1 validators.

“The L2 concern is absorbing due to the fact that present 85% of transactions are connected L2, truthful there’s lone 15% near connected Ethereum L1, but 85% of the measurement inactive lives connected L1,” Haga said. “The L1 has precise constricted engagement, if you will, successful similar the implicit number. But the large wealth is inactive intelligibly connected L1. Then evidently the L2 utilized to wage a batch to settee to L1. And since blobs were introduced successful March 2024, that has fundamentally gone to zero."

Source: Hildobby/Dune Analytics.

“There are wide challenges connected presenting however the interest structure, information availability and interop mechanics each enactment together. Just a fewer years ago, it was truly hard to foretell however the L2s would evolve. Now we spot we person overmuch much clarity.”

Jerome de Tychey, the caput of Ethereum France and organizer of EthCC, added that the aboriginal occurrence of the protocol is simply a balancing enactment betwixt prioritizing L1 mechanics and the symbiosis with L2s.

“We are doing 2 things close now. First, we are putting immoderate accent connected the L1, connected scalability and connected the sustainability of the L2. We person a batch of information astir the aboriginal show of the information facet of things, and besides of perchance the token itself, of course, but besides upgrading however the idiosyncratic acquisition is going to beryllium unfolded successful the adjacent years. That’s a very, precise bully awesome that Ethereum is going to beryllium much accessible from a usability standpoint,” De Tychey said.

Still, the balancing enactment remains a precarious one. How does the Ethereum L1 guarantee that validators are incentivized to support the web moving and debar getting into a show arm-wrestle with new-age furniture 1s similar Solana, SUI and Aptos?

Polygon Labs CEO Marc Boiron offered nutrient for thought, suggesting that immoderate efforts to effort to vie straight with Solana, SUI oregon Aptos mightiness beryllium to the detriment of Ethereum’s future.

“I’m beauteous optimistic astir it successful the consciousness that it does look similar they’re saying, like, OK, possibly let’s absorption connected information availability and execution much than personally I would like, but without truly giving up this payment that we person from a colony perspective,” Boiron said.

“I deliberation it is dangerous, right? If they spell down this roadworthy of trying to vie connected execution excessively heavily, the likelihood is they volition extremity up getting out-competed by those who are trying to bash the nonstop aforesaid thing.”

The adjacent decade

While the measurement of disapproval was deafeningly large implicit the past year, conversations astatine EthCC gave a consciousness of optimism astir the aboriginal of Ethereum.

This optimism is not rooted successful fervour but alternatively successful inferior and onchain metrics. More than 90% of tokenized real-world assets are being built connected Ethereum.

BlackRock, the world’s biggest plus manager, is tokenizing securities connected Ethereum.

Robinhood grabbed headlines successful Cannes with the motorboat of its ain Ethereum-based furniture 2, squarely aimed astatine RWA and securities tokenization.

“If you deliberation astir DeFi versus TradFi, I would accidental perfectly nary accidental that DeFi volition not predominate each the planetary markets. It volition beryllium there. It volition hap connected Ethereum,” Stańczak said.

De Tychey said there’s nary meaningful alternative. “Everything other is simply a shade bid and going successful the incorrect direction, and pushing and lobbying to inactive beryllium capable to beryllium with a batch of antithetic interests, a batch of vested interests.”

Polygon co-founder Sandeep Nailwal summed things up succinctly:

“Ethereum got dragged into the execution game. Whereas Ethereum’s halfway worth proposition is this highly decentralized, sovereign-resistant, permissionless colony layer. And if Ethereum plays good to its strengths and focuses connected being the champion colony layer, we already person capable web effects and the momentum for the full Web3 satellite to beryllium created astir Ethereum.”

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