Ethereum: From Dominance to Rivals Surrounding

Since Bitcoin broke its previous high in 2024 while Ethereum has been drifting further away from its previous high, the doubts about Ethereum in the market have been growing louder. By 2025, Ethereum fell below $3000 in February, below $2000 in March, and even below $1500 in April, as market sentiment towards Ethereum has gradually shifted from doubt to despair and abandonment. Many early addresses have also begun to gradually liquidate their Ethereum holdings. Major institutions that once supported Ethereum have started to waver.

What happened to Ethereum? Is there still hope for Ethereum?

This article will focus on these two questions from the following five aspects, reviewing the rise and fall of Ethereum together with everyone, and looking forward to the possible future of Ethereum.

1. The Glorious Years of Ethereum ( 2017-2022 )

In July 2014, Ethereum launched its ICO. However, from 2014 to 2016, the price of Ethereum remained below $10. During this period, Ethereum had the title of Blockchain 2.0 and its smart contract technology was quite cool, but at that time, Ethereum was not very useful.

In 2017, the狂暴的ICO era began, and Ethereum started to become very useful, with everyone buying ETH to participate in ICOs. By January 13, 2018, Ethereum had risen from $10 at the beginning of 2017 to $1430, reaching its first historical high.

According to incomplete statistics, from 2017 to early 2018, over 2,500 tokens launched ICOs using Ether. During this phase, the greatest value of Ethereum was issuing tokens; ETH was not only the most consumed GAS token on-chain but also the only chip to participate in the IOC wealth wave.

Although various new public chains such as NEO, QUTM, EOS, and TRON have emerged during this stage, in the ICO and smart contract market exclusively monopolized by Ethereum, the combined market share of other public chains is almost negligible.

Ethereum has enjoyed huge benefits as an innovator at this stage!

2018-2019 was the era of a hundred blockchains. Due to the success of Ethereum, countless new public chains emerged in the market. In addition to the few mentioned above, let us list a few public chains that many people may no longer be familiar with, such as: GXC, NULS, ELF, Algorand, etc.

Of course, at this stage, some public chains that are still active today have emerged, such as: TON, ADA, Cosmos, Avalanche. Among them, the most famous is Solana. Yes, at that time, Solana was not particularly prominent among the many new public chains, but years later, it became the biggest challenger to Ethereum, which is quite remarkable.

Although, at this stage, there have been countless new public chains attempting to challenge Ethereum in the market, Ethereum still absolutely monopolizes the smart contract market. Smart contracts were first created by Ethereum; the era of smart contracts was initiated by Vitalik. In the global Crypto field, Vitalik has a huge appeal and influence, second only to Satoshi Nakamoto. The Ethereum ecosystem also gathers the largest number of smart contract developers worldwide, as well as countless native Crypto technology and idea innovators. All of this will be vividly demonstrated in the upcoming year 2020.

Finally, the year 2020 has arrived, the summer of DEFI that countless people yearn for and dream of, the absolute shining moment of Ethereum, has finally come.

After a period of silent fermentation and continuous exploration from 2018 to 2019, the earliest batch of crypto-native applications - DEFI Protocol, finally exploded in the Ethereum ecosystem during that summer of 2020.

A certain platform's unexpected liquidity mining has directly ignited the market, with a large amount of ETH used to mint tokens, causing a surge in TVL and platform tokens, initiating a wave of liquidity mining.

A certain DEX has opened the era of on-chain DEX with the simple formula X*Y=K.

A certain protocol has launched a DEFI yield aggregator, and the token has skyrocketed ten thousand times in 30 days, leaving others far behind.

The DAI launched by a certain project has led to the birth of the first decentralized stablecoin on Ethereum.

A stablecoin DEX on a certain platform allows various stablecoins and DEFI tokens to achieve smooth liquidity on Ethereum.

DEFI Summer has raised everyone's expectations for Ethereum to a peak, because Ethereum can not only be used for issuing tokens, but also to build truly valuable decentralized applications. The future decentralized world will be built on Ethereum. Ethereum is devouring the world.

After the DEFI Summer of 2020, in 2021 and 2022, the Ethereum ecosystem has also successively seen the rise of GameFi, SocialFi, NFTs, and other trends, with waves of innovation making the Ethereum ecosystem appear vibrant and flourishing.

On November 10, 2021, Ethereum reached its all-time high of 4878 USD, and the prosperity of Ethereum peaked.

However, as the funds, users, and applications on the Ethereum chain increase, Ethereum has also started to become more expensive and slower.

Scalability issues have become the biggest obstacle on the path of Ethereum's development.

2. The Expansion and Transition Path of Ethereum(POS-Layer2)

The expansion plan for Ethereum has always had two main directions - transitioning to a POS mechanism and developing Layer 2.

The transition from the POW mechanism to the POS mechanism was set as the direction by Vitalik at the beginning of the creation of Ethereum. Vitalik believes that POS is more resource-efficient than POW, and at the same time, the POS mechanism can enhance the performance of the Ethereum network, allowing Ethereum to have greater scalability.

Layer 2 solutions are also the direction of Ethereum network expansion that Vitalik has been advocating. From the initial exploration of state channels, subnets, and other directions, it later became the mainstream Rollup solution. The OP-Rollup and ZK-Rollup, which exploded in 2022-2023, have brought hope to Ethereum's expansion path.

Whether transitioning to POS or Layer 2, it was considered the right choice for the Ethereum community at the time to keep Ethereum great and prosperous.

Although the transition to the POS mechanism has caused a lot of dissatisfaction among miners, Ethereum officially switched to the POS mechanism on September 15, 2022. The era of POW for Ethereum has ended, miners have left, and in the future, Ethereum can only rely on developers and Layer 2.

However, is Layer 2 really the savior of Ethereum?

After the development from 2022 to 2024, many Layer 2 solutions for Ethereum have been successively launched, among which the notable ones are: Arbitrum, Optimism, zkSync, StarkNet, Mantle, BASE, Blast, Scroll, Linea, Polygon zkEVM, and so on.

However, after each Layer 2 goes live, it does not bring more benefits to Ethereum; instead, it continuously drains and harms Ethereum. Each Layer 2 is engaged in a TVL competition, all creating similar applications, and there are very few Layer 2s that have truly developed applications that are not available on the Ethereum mainnet.

In the end, Ethereum has become a nominal and ineffective Zhou emperor, while the Layer 2s have become independent feudal states, not only continually carving up Ethereum's market but also harboring ambitions to potentially replace it.

Later on, certain DEXs and a group of the initial Ethereum native applications began to build their own Layer 2, even replacing ETH with their own tokens as GAS, which has already been a complete betrayal.

Ethereum has nurtured a large number of Layer 2 solutions, which have ultimately become competitors for mainnet liquidity and developers.

The path of expansion for Layer 2 has been debunked.

Looking back, Ethereum's abandonment of POW is almost like self-mutilation.

The loss of miners has caused ETH tokens to lose their fundamental manufacturing cost and the most basic price carrying mechanism.

Assuming that Ethereum had not transitioned to POS and continued to develop Layer 2 under the POW mechanism, even if Layer 2 developed poorly, the presence of miners and the continuous investment of significant computing power and electricity into Ethereum would still keep the price support mechanism for ETH effective. Therefore, the price of Ethereum would likely not be what it is today, at least not as bad as it is now.

Everything seems so absurd, yet it appears to be destined.

3. The Innovator's Dilemma of Ethereum ( Being Pursued and Blocked by Public Chains like Solana )

Whether the transition to POS and the development of Layer 2 are successful or not, one thing that cannot be denied is that Ethereum has always been the leader in Crypto innovation.

Before 2022, all innovations in the Crypto field were born and developed from Ethereum, and then copied and replicated by other chains.

Ethereum has DeFi, and other chains are following suit with DeFi; Ethereum has GameFI, and other chains are also getting into GameFI; Ethereum has NFT, and other chains want to get into NFT.

Ethereum has been innovating, while other chains have been imitating.

However, innovators often fall into the innovator's dilemma.

The "Innovator's Dilemma" typically refers to the situation where industry leaders, focused on optimizing existing technologies and meeting current user demands, overlook emerging disruptive technologies or market trends, ultimately being surpassed by more agile competitors.

After 2020, Ethereum has been looking for ways to expand in order to optimize its performance and meet the needs of existing users such as those in DEFI. In summary, the focus is on making ETH faster and cheaper. Core developers are basically betting on two paths: transitioning to a POS mechanism and supporting the development of Layer 2.

From the perspective of Ethereum's development, there is nothing wrong with this; it is even the only viable path. However, this is the inevitable dilemma of innovators.

Since users need a faster and cheaper blockchain, then why can't it be a certain platform, why can't it be a certain public chain, why can't it be Solana?

By 2020, what does the crypto market need? What do users need? How can it be engaging? Top players have already figured this out. It's simply about issuing assets, trading assets, and finding scenarios for those assets, and then allowing everyone to engage more quickly and conveniently.

Now, Ethereum is busy expanding, and it's slow and expensive, so a fast and cheap blockchain has the opportunity.

As a result, a certain public chain has taken over the stablecoin market.

Some platforms have created a closed-loop logic around their exchange ecosystem barriers, restricting project issuance and trading.

The most terrifying thing is Solana, as the foundation personally gets involved, using the simple and brutal Meme method, uniting various forces, continuously creating a wealth myth, making Sol the philosopher's stone that everyone desires in the Meme frenzy.

Ethereum is being surpassed by competitors.

Ethereum has always been an innovator and leader in underlying blockchain technology. Whether it's the initial smart contract technology or the later various decentralized applications, they are all products that lead the era.

However, everything about the public chain is open source, and there are no secrets to speak of.

If you innovate a technology today, I can use it tomorrow.

You have created a new way to play today, and I can imitate it right away.

Ethereum from 2017 to 2022 has continued to shine due to its leading technology and constantly innovative ecological gameplay. However, after 2022, as Ethereum's core developers focused their energy on expanding performance and other underlying research, innovation in applications and gameplay began to slow down. Those new chains without performance issues can concentrate their efforts on model innovation. Therefore, when Ethereum is focused on underlying research, those flexible competitors who concentrate on model innovation can quickly overtake.

Because if Ethereum does not innovate, it will fall behind; this is the fate of open-source public chains.

However, is this Ethereum's fault?

No.

Ethereum is not wrong; working on performance expansion, underlying research and development, and providing better infrastructure are all valid pursuits. This is a dilemma that innovators inevitably face as they develop to a certain extent.

In addition, the weakness of Ethereum also highlights a more severe issue, which is that the Crypto industry is truly underdeveloped.

4. The weakness of Ethereum is the underdevelopment of the entire industry

Besides Bitcoin, Ether