A Decade: The "Soul Battle" of Ethereum

After ten years of existence and establishing a dominant market position, Ethereum is facing a profound debate about its core identity.

The key to this "battle for the soul" lies in whether Ethereum's future should be to become a high-performance execution layer that directly competes with emerging rivals, or to consolidate its unique position as the world's most secure and decentralized settlement layer, serving its thriving Layer 2 ecosystem.

Layer 2 refers to off-chain networks, systems, or technologies built on top of the underlying blockchain (often referred to as Layer 1), aimed at expanding the underlying blockchain network. Relevant data shows that Layer 2 transactions account for 85%, but large amounts of capital still primarily remain on the Ethereum mainnet.

Faced with this contradiction, several founders, CEOs, and key builders in the Ethereum ecosystem shared their views with the crypto industry media Cointelegraph at the recent EthCC conference held in Cannes, including Tomasz Stańczak, co-executive director of the Ethereum Foundation (EF), Sandeep Nailwal, co-founder of Polygon, and Jerome de Tychey, president of Ethereum France.

Tomasz Stańczak stated that unifying the ecosystem, enhancing interoperability, and improving user experience have become the top priorities over the past 18 months; Polygon Labs CEO Marc Boiron warned that attempting to compete with next-generation public chains like Solana in execution speed is "dangerous."

Fredrik Haga, co-founder of Dune Analytics, pointed out that since the introduction of Blobs in March 2024, the fees for Layer 2 settling to the mainnet have dropped to nearly zero, which is a technical breakthrough but an economic setback for Layer 1 validators.

Despite intense internal debates, market signals show strong confidence. BlackRock, the world's largest asset management company, is conducting asset tokenization on Ethereum, and over 90% of real-world asset (RWA) tokenization projects have chosen to build on Ethereum.

This indicates that the market may have already provided an answer to Ethereum's "soul" through action: an irreplaceable global settlement layer.

The Cost of Scalability

Since 2015, Ethereum's evolution has been filled with trade-offs.

From the transition from Proof of Work (PoW) to Proof of Stake (PoS) known as "The Merge," Ethereum has successfully achieved a transformation of its consensus algorithm, fundamentally changing the way the protocol operates.

However, with the surge in users and applications, the performance bottlenecks of its underlying chain have become increasingly prominent. To address this issue, the community has adopted a Layer 2-centric scaling roadmap, shifting transaction execution to independent second-layer networks.

This strategy optimizes scale, speed, and cost through innovations in cryptographic technologies such as zero-knowledge proofs (ZK-proofs). In particular, the "Blobs" feature introduced in the 2024 Dencun upgrade has led to a 90% drop in Layer 2 transaction fees.

This technical victory, however, has put pressure on the incentive income of Layer 1 validators.

Data shows that although 85% of transactions currently occur on Layer 2, 85% of the capital remains on Layer 1.

The Foundation's Balancing Act

Faced with the complex dynamics of the ecosystem, the Ethereum Foundation (EF) is trying to play the role of a balancer.

After restructuring in 2025, a new team led by co-executive directors Tomasz Stańczak and Hsiao-Wei Wang is fully promoting a unified ecological vision.

The Pectra upgrade launched in May this year is the latest manifestation of this effort.

The Pectra upgrade includes 11 Ethereum Improvement Proposals (EIPs), aimed at further enhancing scalability, user experience, and staking efficiency.

Stańczak stated that the foundation's top priority over the past 18 months has been to address issues of liquidity unification, interoperability, and improving user experience:

"The current focus is on interoperability, tools, and standards, making all chains around Ethereum feel like a single ecosystem where users can naturally transfer assets between them."

Jerome de Tychey, president of Ethereum France, added that the future success of the protocol depends on finding a balance between prioritizing the development of Layer 1 mechanisms and maintaining a symbiotic relationship with Layer 2.

He believes that the community is simultaneously focusing on the sustainability of Layer 1 and the security and user experience of Layer 2, which is a positive signal indicating that Ethereum is becoming more user-friendly.

Competition or Focus?

The debate about the future of Ethereum ultimately boils down to a strategic choice: should it compete directly with high-performance public chains like Solana, SUI, and Aptos at the execution level, or focus on its core strengths? Marc Boiron, CEO of Polygon Labs, issued a clear warning regarding this matter. He believes that if Ethereum overly invests in competition at the execution layer, it is likely to be "surpassed" by competitors who have focused on this from the beginning.

He stated, "Trying to overcompete on execution is dangerous."

Polygon co-founder Sandeep Nailwal's viewpoint is even more direct; he believes that Ethereum's core value proposition has always been "highly decentralized, resistant to sovereign censorship, and a permissionless settlement layer."

He summarized:

"Ethereum is being dragged into the execution race, which is not its strong suit. If Ethereum can leverage its strengths and focus on being the best settlement layer, we already have enough network effects and momentum to build the entire Web3 world around it."

What’s next for the next decade?

Despite the constant criticism over the past year, discussions at the EthCC conference generally conveyed an optimistic sentiment about Ethereum's future.

This optimism is not born from fervor but is based on real utility and on-chain metrics.

The strongest evidence comes from institutional adoption—over 90% of real-world asset (RWA) tokenization choices are made on Ethereum.

Asset management giant BlackRock has tokenized its securities products on Ethereum, while Robinhood also announced during the conference the launch of its Ethereum-based Layer 2 network, targeting RWA and securities tokenization.

These actions clearly indicate that large traditional financial institutions value Ethereum's security and decentralization as a settlement layer more than mere transaction speed.

"DeFi (decentralized finance) will undoubtedly dominate the global market, and all of this will happen on Ethereum," asserted Stańczak from the Ethereum Foundation.

Jerome de Tychey made an even sharper statement:

"Everything else is a ghost train heading in the wrong direction."

This seems to suggest that, regardless of internal debates, Ethereum's status as a trust anchor has reached a consensus in the market.

Risk Warning and Disclaimer

The market carries risks, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk