Author: Frank, PANews
As the bull market enters the altcoin season, time seems to be running out for ETH. Since the beginning of this rising cycle at the end of 2023, ETH's performance has been closely watched. However, it seems that ETH has underperformed expectations in the past year. The most intuitive observation is that, in terms of growth, from October 2023 to now, the maximum increase has been 170%, hovering around the $4000 mark without a significant breakthrough. On the other hand, BTC's maximum increase during the same period exceeded 300%, and SOL's increase exceeded 1300%. Many people believe that ETH represents the opportunity for the altcoin season, but with multiple established altcoins experiencing significant short-term increases recently, ETH's momentum is clearly insufficient.
As the leading public chain, Ethereum, from an objective standpoint, with Uniswap transitioning to its own chain, validators on the Ethereum network may lose about $400 million to $500 million in revenue annually. However, more serious than this economic loss is that it threatens the fundamental narrative of Ethereum as a deflationary currency. Uniswap's universal router is the largest account consuming gas fees, accounting for 14.5% of Ethereum's gas fees, which corresponds to the destruction of Ethereum worth $1.6 billion.
Summarizing the performance of the above indicators, we can conclude the following features. The on-chain network activity of the Ethereum mainnet has not grown in the past year, and its share in the entire Ethereum ecosystem is gradually declining. This at least indicates that new users are basically choosing other Layer 2 or other public chains (after all, emerging public chains like Solana, Sui, and Aptos are maintaining rapid growth in these data).
Therefore, returning to the initial topic, has there been a significant change in Ethereum's fundamentals? Or is ETH's price undervalued? Based on the above data, it seems that the Ethereum mainnet is transforming into a reservoir of funds for large players and institutions, and even with a significant decrease in gas fees, it still cannot compete with Layer 2 or other public chains in terms of transaction fees and speed. Therefore, the Ethereum mainnet is clearly no longer a club for small retail investors, and for currently popular tracks like MEME, it no longer has the advantage of community size. It is more suitable for players who have lower frequency requirements and higher asset security needs. From this perspective, we can only say that the ecological role of the Ethereum mainnet is undergoing a transformation, with liquidity and security becoming the last moat of the Ethereum mainnet.
