Challenges and Opportunities of Ethereum: Strategic Transition from Layer 2 to Layer 1

Recently, Ethereum has faced numerous challenges, including poor price performance and skepticism regarding its Layer 2 strategy. However, at the same time, Ethereum is actively responding by making strategic adjustments and technological innovations. This article invites Dr. Zhou, the founder of EthStorage, and Lawrence, a researcher at Mint Ventures, to delve into Ethereum's current situation, future development direction, and investment value.

The Main Issues Currently Facing Ethereum

1. The Layer2 strategy has not met expectations and has not effectively increased the value of Ethereum.
2. The project progress is slow, and the upgrade cycle is long.
3. The extreme pursuit of decentralization has affected efficiency.
4. There are fewer new business models and innovations on-chain.
5. There is a disconnect between the research and development team and the development team.

Ethereum's Response Measures

1. Refocus on Layer 1 scaling, with a plan to achieve a 10x expansion within one year.
2. Organizational restructuring, adding two executive directors
3. Conduct layoffs and optimize resource allocation
4. Actively optimize client performance, such as performance improvements for Geth and Nethermind.
5. Take a more pragmatic approach to the balance between decentralization and efficiency.

Market Consensus and Divergence

Consensus:

• Layer2 strategy needs adjustment
• Need to improve Layer 1 performance and scalability.

Divergence:

• Degree of commitment to decentralization
• Is there a need for more aggressive reforms?
• Should Vitalik's influence be diminished?

The Investment Prospects of Ethereum

Reasons for optimism:

1. Strong developer ecosystem and network effects
2. Still has advantages in the DeFi and financial application fields.
3. There may be a rebound in performance due to a sharp decline in the short term.

Caution reason:

1. There is uncertainty in the long-term route.
2. Being overly conservative in decision-making may affect long-term competitiveness.
3. A low tolerance for errors may hinder innovation.

Conclusion

Ethereum is in a critical period of transformation. Although facing challenges, it also shows a positive attitude in response. Investors should pay attention to Ethereum's progress in technological innovation, organizational change, and market adaptability to assess its long-term value. At the same time, whether Ethereum can enhance flexibility and efficiency while maintaining its core principles will be a key factor in determining its future development.