2024 is an extremely challenging year from the perspective of ETH price and market sentiment.
Written by Christine Kim, Vice President of Research, Galaxy Digital
Compiled by: xiaozou, Golden Finance
What is Ethereum? Ethereum is the world's most decentralized, valuable, and mature general-purpose blockchain. While Ethereum is ultimately a technology first, this year's Ethereum Developer Conference Devcon focused on Ethereum as a concept, focusing on how much the principles and values that drive the development of the Ethereum protocol have changed over the years.
1. Ethereum had a bad year
2024 is an extremely challenging year from the perspective of ETH price and market sentiment.
Many critics of Ethereum believe that over time, the Ethereum community’s cypherpunk values of decentralization, trusted neutrality, and censorship resistance have faded or even been abandoned entirely. Even within the Ethereum community, differences in values have sparked debate during the Pectra upgrade decision-making process and sparked heated debates on X over topics such as the blob fee market and issuance.
While Devcon 7 showcased a plethora of technical innovations and announcements, none of them provided the community with a clear message about the long-term value and narrative of Ethereum. By far, the most anticipated announcement of the week, shared by Ethereum Foundation researcher Justin Drake, was the launch of Beam Chain, a radical proposal to overhaul Ethereum’s current consensus protocol, Beacon Chain.
While Drake detailed several new technical features designed to enhance Ethereum and L2 functionality, the proposal lacks broad community support and fails to provide a “North Star” (a forward-looking goal) that would excite stakeholders similar to the Ethereum Merge, which transitioned Ethereum to proof-of-stake.
Merge has been the North Star of Ethereum for several years. It is a technical upgrade that is rooted in the values of environmentalism and decentralization that almost the entire community agrees on. Since the merger of Ethereum, there has been no technical upgrade that has clearly aligned values with Ethereum, which in turn has led to confusion and disputes among Ethereum stakeholders about how Ethereum as a technology should develop.
2. What is Ethereum?
In addition to a flurry of technical announcements, the ideas presented at Devcon about how Ethereum should be built and how it should be built in a way that promotes the values of decentralization and trusted neutrality greatly stimulated the interest of Devcon attendees. Although all speakers presented slightly different ideas about Ethereum, they all shared a common basic belief that Ethereum pursues the creation of permissionless, trust-minimized, transparent systems for the purpose of improving human welfare.
If you’ve ever doubted that Ethereum’s cypherpunk values spur innovation, the Devcon 7 talks emphasized that these values remain core to Ethereum’s philosophy. When asked about the trade-offs between decentralization and performance, all four members of the “Ethereum Values and Ethos Alignment” panel reiterated the importance of decentralization over performance and scalability.
Philip Daian, co-founder of Flashbots, talked about four characteristics of "Ethereum 3.0" in his keynote speech, which cannot be compromised in any way. They include: permissionless, distributed, geo-economic decentralization, and a truly neutral builder. Daian asked the Ethereum community to refocus on promoting and strengthening geographic diversity and permissionless design in all verticals of the Ethereum technology stack, rather than focusing entirely on other goals such as promoting mass adoption through improved user experience.
“The problem is, if you focus purely on user experience, it’s going to be terrible. I think that’s what’s going to drive ETH to zero. It’s going to destroy the decentralized system that we’ve carefully created, and make us vulnerable to exploitation and re-formation of the system we’re trying to avoid,” Daian said in his keynote. In his keynote, Gnosis co-founder Martin Koeppelmann introduced the concept of “native rollups,” rollups built on Ethereum’s values of decentralization and trusted neutrality. From a practical perspective, for Koeppelmann this means not using multi-sig, which controls key rollup functions, deploying multiple rollup proof systems, and rigorously testing the rollup codebase (i.e., “thousands of eyes reviewing every line of code”), just like Ethereum.
Finally, a full day of Devcon programming was dedicated to exploring the philosophy of defensive acceleration, or “d/acc.” In the words of creator Vitalik Buterin, “d/acc is a philosophy, a set of techniques, and protocols for building technology that enables human agency as both a means and an end. Every technology we create should be directed toward shared human freedom and happiness.” Many Devcon attendees received a booklet on the philosophy of d/acc as part of the conference swag, and on the last day of the conference, a booklet on the future of the Ethereum protocol, both written by Vitalik Buterin.
Devcon 7’s playbook and programming emphasized shared philosophies among Ethereum developers rather than a shared technical roadmap. The most compelling “North Star” raised at the conference, more than any innovation, upcoming upgrade, or development team in the Ethereum ecosystem, was the attendees’ shared desire to build permissionless, trust-minimized, transparent systems for the betterment of humanity.
