Ethereum is like a deposed eldest prince!
Although he was abandoned, many of his former POW members still have illusions about him, which is why many people are still stubborn against him.
Judging from the activity of the on-chain ecosystem and the price of the currency, it is far behind SOL.
At the beginning of the year, ETH was 4k. Now, ETH has been around 2.5k for a month.
Why has ETH been on a downward trend after more than half a year?
Let's analyze the reasons why ETH continues to weaken:
1. Reasons for demand
Ethereum’s L2 and Restaking narrative has not driven ETH demand as significantly as previous ICOs and DeFi.
The high degree of overlap between L2 and the main chain leads to inactive trading. Although Restaking locks ETH to reduce liquidity, it fails to allow more assets to be denominated in ETH, limiting the demand for ETH.
2. External factors
The macro environment has changed from loose to tight, and the flexibility of ETFs (free entry and exit) has allowed old and new whales to cash out through ETFs, further suppressing the price of ETH.
3. Cost structure in the PoS era
In the PoW era, miners will stop selling when the ETH price is lower than the cost due to the high fiat currency costs, thus raising the lower limit of the ETH price.
However, in the PoS era, the costs for validators and stakers are relatively low and mainly based on currency. There is no clear "shutdown price", so the lower limit of ETH price will not be maintained, causing pressure on ETH price.
4. Historical issues
The painful experience of the ICO crash in 2018 made the Ethereum core circle more conservative, emphasizing orthodoxy and roadmap, resulting in the formation of an ecosystem of "to V entrepreneurship" and "halal = high valuation". The low split rate, insufficient liquidity, and market returns that are not as good as those of competitors have further weakened Ethereum's market performance.
Ethereum Foundation is doing evil
The Ethereum Foundation recently transferred nearly 100 million US dollars of ETH to the exchange and continued to sell coins for profit, which aroused public outrage in the community.
Ethereum's crypto market share (ETH.D) has been falling since the end of 2021, and has fallen by 32.5%.
The Ethereum Foundation is to blame, and it has 6 sins!
1. Corruption:
The core developers or researchers of the Ethereum Foundation earn income as consultants for projects built on Ethereum; the Foundation is “congressionalized” and is hunted by all kinds of funds and interests, and never tires of it;
2. Bloated and inefficient:
As many as 300 members who receive ETH subsidies are parasitic on Ethereum and sucking the blood of Ethereum; most of them are doing research on paper and are indifferent to innovative projects applying for subsidies;
3. Opaque:
The annual expenditure of 100 million US dollars is not disclosed, and the amount of each person's allowance is not made public; the people in the foundation only know how to flatter the top staff;
4. Ideology first:
In the past year, the Ethereum community did not talk about development or application scenarios, but talked a lot about "legitimacy"; survival in the ecosystem depends on "licking", and whoever licks the most will get the resources;
5. Inaction:
The protocols and applications on Ethereum are fleeing to other public chains such as Solana. The foundation only threatens to sell coins, but does not actively communicate to save the situation, and does not serve high-quality potential projects well.
Not actively marketing Ethereum and not bringing incremental value to Ethereum;
6. No innovation:
Iteration is slow, and not innovating means waiting for death. There are only one or two updates a year, with minor changes and additions. It is complacent and lacks cutting-edge.
Ethereum founder Vitalik’s decentralized mask
Is ETH quietly becoming a private bank?
In the world of blockchain, "decentralization" has always been a biblical creed, but the recent actions of Ethereum founder Vitalik.eth have made people question the sincerity of this belief.
On August 30, according to Lookonchain monitoring, Vitalik.eth transferred 800 ETH (about US$2.01 million) to a multi-signature wallet in just 40 minutes, and quickly sold 190 of the ETH in exchange for 477,000 USDC.
This is reminiscent of his actions on August 9, when Vitalik also transferred 3,000 ETH (about US$8.04 million) to the same wallet.
This can't help but raise the question: Is Vitalik gradually transforming ETH into a centralized private bank?
As the blockchain community advocates decentralization and transparency, does this operation go against the ideals he promotes?
Perhaps we need to re-examine whether the founder of Ethereum is a staunch supporter of decentralization or a "hypocrite" who quietly turns blockchain assets into private wealth?
While advocating decentralization in public, they are privately operating a centralized wallet like a "private bank". This behavior is worth our reflection.
Perhaps, it is time for us to be wary of those who shout slogans of decentralization. Are they really practicing the ideas they preach?
Or is this just another form of centralization of power disguised as a blockchain?
In the future, how the Ethereum community will respond to this question is worthy of our close attention.
Ultimately, these factors combined to cause Ethereum to perform poorly at the beginning of this bull run.
In conclusion:
If you need better and more stable benefits, BTC is naturally the first choice. If you need a more aggressive but relatively stable target, there is no reason not to choose SOL with its youth and beauty.
If you want to find a golden shovel hen target, BNB is perfect. I really can't find any reason to choose POS ETH as the target.
In an analogy
Hypothesis: BTC is like a 30-year-old rich woman with a gold vault at home, then ETH is like a 30-year-old middle-class young woman with a silver vault at home, and SOL is like an 18-year-old young and beautiful woman in the home of a Wall Street group.
If you can only choose two, which two would you choose?
There is no good or bad without comparison. The current POS Ethereum and the previous POW Ethereum are no longer comparable.
