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Earlier than Ethereum’s current improve, Layer 2 (L2) networks have been main consumers of ETH. They used it for transactions and token burns, which lowered Ethereum’s total provide and strengthened the community. This method supported initiatives like Celestia and Avail, serving to Ethereum preserve deflationary attraction. However now issues have modified.
What precisely occurred to Ethereum?
— H.E. Justin Solar (@justinsuntron) March 12, 2025
Justin Solar Ethereum Criticism: A Main Improve Shifted the Market For Ethereum
After the improve, issues modified. Now, L2s are promoting extra ETH than they purchase. This implies Ethereum’s provide is rising as a substitute of shrinking, making it much less engaging as a deflationary asset. Buyers are involved as a result of this shift weakens the community’s stability.
It’s been dying each because the blob improve. Earlier than the blob improve, the L2’s have been big consumers of eth by token burn. Plus it supported cash like celestia and avail. Because the blob improve, the l2’s internet promote eth. The eth provide goes up. It was taking place earlier than.
— Solanasaurusrex.sol (@Christo86383094) March 12, 2025
No clear imaginative and prescient.
Both PoW for sovereignty and decentralization OR PoS with very low charges and scalability.
However proper now they’ve a foot in each camps which makes the protocol too pricey in comparison with different L2s like Starknet and never very decentralized prefer it was with PoW.
— Tom Megati (@TomMegati) March 12, 2025
Ought to it deal with being extremely decentralized and sovereign?
Or ought to it prioritize decrease charges and higher scalability?
Vitalik pic.twitter.com/wDvXoRKfeI
— Robin Nakamoto (@RobinNakamoto) March 12, 2025
Key Takeaways
Ethereum’s Improve Modified the Market – L2s are actually promoting extra ETH than they purchase, rising provide and weakening its deflationary attraction.
Scalability and Charges Stay an Difficulty – Regardless of PoS, Ethereum nonetheless struggles with excessive prices and gradual transactions, whereas L2s like Starknet supply higher options.
Decentralization Is Weaker – Transferring from PoW to PoS lowered Ethereum’s independence, leaving it with no clear course.
Ethereum Wants a Clear Technique – It should select between decentralization and scalability to stay aggressive.
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