Original Title: "EP31: Rethinking Ethereum: What are the Bullish Reasons for ETH Now?"
Original Source: Mint Ventures
· Host: Alex, Research Partner at Mint Ventures
· Guests: Zhou Qi, Founder of EthStorage; Lawrence, Researcher at Mint Ventures
· Recording Date: 2025.6.5
· Disclaimer: The content discussed in this podcast does not represent the views of the institutions of the guests, and the projects mentioned do not constitute any investment advice.
Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we clarify facts, explore realities, and seek consensus in the WEB3 world through continuous questioning and deep thinking. We aim to clarify the logic behind the hot topics, provide insights that penetrate the events themselves, and introduce diverse perspectives.
Alex: In this episode, we have Dr. Zhou from EthStorage and our researcher Lawrence. Let's talk about a blue-chip target that crypto investors are very concerned about - Ethereum. We know that Ethereum's overall performance in this cycle has not been very good, and its exchange rate has consistently underperformed BTC, and it has not been able to match its rival Solana for most of the time. However, there have been many notable changes in Ethereum recently, such as Vitalik becoming very resolute in scaling Layer 1, and then restructuring the structure and laying off employees, showing a more pragmatic attitude on the whole. Is this an inflection point for Ethereum's reinvigorating price? Before we begin our formal discussion today, we would like to ask two of our guests to introduce themselves to our listeners. Dr. Zhou came first.
Zhou Qi: Hi, I'm Zhou Qi, the founder of EthStorage. I'm excited to share some of our insights on Ethereum today, including some of our recent work on Ethereum. In fact, in 17 or 18 years, we studied the entire Ethereum technology very deeply, including the scaling roadmap of Ethereum, from the previous Layer 2 to the current Layer 1, including participating in a lot of research work on Ethereum, and also got a lot of Ethereum support, including some research on DA, as well as some related research with OP Stack, and also won a lot of grants. So today we're really excited to share some of our relatively unique insights into this.
Lawrence: Hello everyone, I am Lawrence from Mint Ventures. I am very glad to be here today to discuss this issue with Dr. Zhou.
The reason why this round of Ethereum underperformed against BTC and SOL
Alex: So let's get to the point of today. Before discussing the bullish reasons for Ethereum to look forward to today, we can first sort out the problems that Ethereum is currently facing. In the eyes of the two, what are the main reasons why Ethereum has significantly underperformed BTC and Solana in this cycle? Otherwise, please ask Zhou Bo to share this question first.
Qi Zhou: I think there are several reasons. The first aspect is the roadmap of Ethereum as a whole, especially the roadmap with Layer 2 as the core, in fact, everyone finds that it is not so consistent with the core value of Ethereum. That's actually something I discussed with Vitalik when I met him at East Asia last month, and that's one of his thoughts. We can see that, for example, last year, before EIP 4844 was launched, Ethereum was still in a relatively deflationary state. However, when the 4844 upgrade was launched, the fee for L2 to submit data to Ethereum dropped significantly, and at the same time, many L2 values were not reflected in Ethereum itself. For example, many L2 projects, such as Base and Arbitrum, have received a lot of user fees, but these fees have not fed back the value of Ethereum itself. So there's a big incentive incompatibility.
Second, from the perspective of Ethereum itself, because it performed very well in the last cycle, it also affected its judgment in a sense, making it relatively slow in some aspects, such as engineering progress. At that time, there was no real challenger to Ethereum, whether it was Bitcoin or Solana. In this wave, many people complained that Ethereum was changing too slowly, and the roadmap was planned for a long time, but there was no actual engineering implementation. Each upgrade takes one to two years to be functional. In contrast to Solana's aggressive engineering advancements, Ethereum has always been a research-biased model that doesn't particularly prioritize engineering. This approach has caused a large lag in the overall development and upgrade roadmap of Ethereum. We have a lot of personal experience in this area, for example, we did a lot of EIPs for Ethereum in the past few years, including EthStorage itself, which we can talk about later. To sum up, there are mainly these two aspects.
Lawrence: The two points that Zhou Bo just talked about are also the two points I want to make. Another important point I think is that in this cycle, there are relatively few new business models or new innovations on the chain. The richness and activity of on-chain business have not improved much compared to 21 years, and even if we remove meme transactions overall, the activity and richness of on-chain business may have decreased slightly. On the contrary, the fundamentals on the BTC side have improved significantly. Therefore, in fact, the overall performance of all public chains is not good. Even Solana, which has performed better, is at least 50% away from its 21-year high compared to BTC, and 50% worse than the previous one. I think this is also a common problem encountered by all Layer1s in this round.
The other two points are what Dr. Zhou just mentioned. One issue that can be said to be a strategic issue for Ethereum in the last two or three years is this Layer2 strategy. I think to be quite frank, it can basically be judged as a failure. Another point, which I summarized, may be a long-term structural problem of Ethereum, and it is not yet a short- and medium-term strategic problem. I've seen a lot of criticism lately, especially one named Max Resnick, and I think it's pretty typical. Max, who had previously been a researcher at the Ethereum Foundation, switched to Solana at the end of '24 and went to Anza, the team that Solana Labs spun off to do R&D. In the past, when he was actually in the Ethereum Foundation, he did not support the rollup strategy, but supported the extension of Layer 1. He has some very sharp criticisms of Ethereum, such as the fact that he believes that the people who developed the Ethereum roadmap, Vitalik to be exact, specialize in blockchain and cryptography, and less on computers. In this way, for a long time in the past, there have been many deviations in Ethereum's judgment and research on how to improve the performance of the blockchain, which may be very basic and factual in his opinion, including deviations in direction. For example, the Ethereum Foundation has long argued that the bottleneck to Ethereum's performance improvement lies in the execution layer.
However, according to him, the bottleneck for performance improvement is obviously at the consensus layer. And he also mentioned that Vitalik, or the people who make the Ethereum roadmap, are too long-term, pursuing directions that seem relatively illusory at the moment, rather than focusing on current users. For example, Vitalik himself has been talking about privacy apps and social apps on his blog, but has talked less about DeFi. But in reality, DeFi has always been the one that exists and is used by the most people on the Ethereum mainnet. This issue was debated for a while in July or August last year, and Vitalik and several leading DeFi projects on Ethereum were talking about it. Including because of these reasons, Zhou Bo also mentioned just now, Ethereum's R&D efficiency is actually quite low. On the one hand, there is a large disconnect between the research team and the development team, and there is a large gap between what the research team studies and what the development team develops. On the other hand, its R&D progress is really slow, basically only one major upgrade a year. In fact, Vitalik may have started to mention this matter in 15 or 16 years, but it was not until the Shanghai upgrade in 23 years that this matter was officially closed. In the past, there weren't many upgrades that people could call after '21: Merge '22, Shanghai '23, Cancun last year, and Pectra just past.
Overall, the development schedule is very slow, which makes it very expensive to correct errors, especially time. For example, the Layer2 strategy problem just mentioned, in the case of Ethereum, is: in 2020, Vitalik proposed to focus on Rollup, but in fact, it was not until 2022 that related things were implemented, and now in 2025, everyone found that it was not possible and needed to change. There's a lot of time wasted in between. Especially compared to the likes of Solana and some new Layer 1s, such as Sui, the gap between their R&D schedules is close to an order of magnitude of efficiency. In other words, Ethereum may have to take 10 times as long as other public chains to make a decision and push this thing online. Of course, I think there is a reason for this, because Ethereum is the first more influential public chain after Bitcoin, and it faces many problems, including many previous regulatory considerations, and then it has always insisted on decentralization relatively speaking. However, judging from the results, I think that the problems just mentioned are a long-term structural problem that belongs to the Ethereum Foundation or the core layer of Ethereum, that is, the people who make the Ethereum roadmap. I probably think that's the main thing.
Alex: Okay, I might want to add one more point. In fact, Lawrence also mentioned that the concept of the top level of the Ethereum Foundation is very persistent in the insistence on decentralization. Until the last cycle, this was considered one of the elements of blockchain legitimacy. But there have been quite a few changes in this round. One of the most important changes is that there has been a big change in the leadership of the US administration. This round of the U.S. government is very pro-crypto and very loosely regulated. As a result, at least in this cycle of administration, the encirclement of crypto projects and the fight against censorship have become less urgent. Ethereum's high obsession with decentralization has become less necessary in this government cycle. On the contrary, like Sol and Sui, they may not have a high degree of decentralization, but their efficiency and performance are very good, which has become an advantage.
And in the long run, I feel that even if the next administration changes to the Democratic Party, the Democratic Party will realize that the vote base of crypto investors on the US side is very important. Under such a premise, I believe that they will not be as brutal as Gary Gensler's last round of encirclement of crypto projects during their tenure. Therefore, the necessity of decentralization is gradually decreasing with the changes in the industry. We see that many projects that have actually emerged in this round, such as Ethena, including RWA, a narrative that many investors think is very important, are actually the products of the combination of CeFi and DeFi, which is the general trend. The decline in the importance of this narrative has actually weakened Ethereum's consensus to a certain extent. This is one of the reasons why this round is not as narratively better than SOL.
Consensus and Non-consensus on Ethereum Issues
Alex: Let's move on to the next question. We've just talked a lot about Ethereum, including its engineering capabilities, some understanding of its development direction, the slow pace of error correction, and so on. So with so many questions asked, what is the consensus among Ethereum leaders, the community, and developers on these issues? What are the non-consensuses? To put it more simply, what are the issues that everyone from Ethereum's core management to the community and developers agree to be problems? Which ones are divisive? Let's say we think it's a problem, a hindrance, but Ethereum's current attitude is that it's not a problem, it's a feature that we're very concerned about. What do you think about this? Let's start with Dr. Zhou.
Qi Zhou: I think one of the most important points in this wave is that there has been a very big change in Ethereum's definition of decentralization. I can say that a few years ago, Ethereum had a very idealistic, even somewhat religiously fanatical, approach to decentralization. I remember talking to some people in Ethereum at the time, and they said that they wanted Ethereum L1 to be a minimal layer of trust, so that something like a mobile phone, or even a very simple embedded device, could run an Ethereum validator. But it's clear that this time, after challenges such as Solana, especially in the upgrade roadmap for L1 scaling, including increasing the gas limit and introducing block-level access lists to speed up transactions at the execution layer, they are actually looking for a more practical way to find a trade-off between decentralization and execution efficiency. This also means that we may need a slightly more powerful computer.
The immediate problem is that you now design an Ethereum consensus and let a mobile phone or a 100 yuan device run the validator, but you need at least 32 Ethereum. At the current price, it's probably nearly 100,000. This is actually a mismatch. Your device isn't the bottleneck that causes the validator, it's just that you need to have too much Ethereum. So under this premise, why can't this assumption be loosened? For example, can we make computers worth $1,000, $2,000, or $3,000 run nodes, and at the same time, Ethereum's L1 throughput can be doubled, tripled, or even scaled by 10x? This is Ethereum's next plan. This is a very pragmatic adjustment of Ethereum's search for decentralization and execution efficiency. For example, we submitted a proposal to Ethereum two years ago, which is the ESP grant. We'd like to look into the block-level access list. What it means is that when I pack a block, I can tell other validators what data I access when I execute those transactions. In this way, they can use the technology of pre-access to perform high-concurrency pre-reading of randomly accessed data such as account balances in advance, which greatly improves the execution efficiency.
Two years ago, we only applied for $10,000 to study this issue, and we felt that this research was valuable and helpful for Ethereum, but it was rejected without explaining why. Our guess is because Ethereum feels that this may have an impact on decentralization, not top priority. But at the beginning of this year, they suddenly said that they wanted to do this kind of research and that we were welcome to participate. This shows that Ethereum's paradigm has shifted from the ideal concept of decentralization two years ago to a more pragmatic perspective. Especially with the increase in computer performance and the decrease in cost, it is still roughly in line with Moore's Law. If Ethereum still follows the original design framework and does not dynamically adjust the gas limit, or does not dynamically add the block level access list, then the execution efficiency cannot be released, and it is difficult to achieve the possibility of tenfold scaling, for example. I'm surprised, two or three years ago I wondered why they didn't think about it. I can only understand it in terms of their insistence on idealism.
On the non-consensus part, I think Ethereum is still burdened with a lot of "debt" - including technical debt, cognitive debt, and even brand debt. That is to say, when it is going to carry out a major reform, many times it cannot directly deny itself. Historically, such as China's reform and opening up and the transition of some leaders in the Soviet Union, we can see that slow but firm reforms are more effective than completely overthrowing the past. As an example, Ethereum now has a multi-client roadmap. At both the execution and consensus levels, there are clients written in four or five different languages. Historically, we've seen particularly successful infrastructure software, such as Solana itself, the Linux operating system, HDFS, etc., basically implemented in one language, one set of testing frameworks. What they're looking for is engineering efficiency. Ethereum, on the other hand, has experienced a DAO attack and predicted that it might use a language, and some mechanisms will be introduced due to the vulnerabilities of this language, which will lead to downtime. Because Ethereum is still changing very fast, unlike Bitcoin, many functions have been relatively solidified.
So they'd rather spend ten times as much work to prevent this risk. But doing so would require five to ten times the engineering effort of Ethereum to keep up with Solana. That's why Ethereum is so slow with every upgrade. We've been personally involved in the upgrade process of Ethereum, including EIP development, DevNet, and TestNet, and will find that it takes a lot of effort to coordinate implementations between different clients. For example, in this Pectra upgrade, it was found that Geth was inconsistent with other client configurations, resulting in out-of-sync and had to be repaired immediately, and finally found that the problem was with Geth. It's a trade-off, and it takes a lot of effort to do it.
So here I am thinking about a question: Is it necessary that a fast-changing software like Ethereum must not go down? Solana has been down several times, as have other projects. Maybe we can allow downtime, but the recovery is fast. By maintaining only one client at the same time, you can iterate faster. It's really a software engineering problem. I've seen that Ethereum has also been recruiting for example, Lead Performance Developers, for example, to focus more on solving schedule issues more efficiently from an engineering perspective. I've been in big factories and know that downtime is the norm. Even if you have money and engineers, you often have problems. It's not uncommon for us to talk about how many times our systems have been down, such as Meta or Google, which have been completely inaccessible for an hour. Therefore, how to overcome these problems is an issue that deserves in-depth discussion, and it is also an aspect in which there is still no consensus.
Lawrence: I understand that the current consensus is that the strategy of focusing on Layer 2 in the past is to shift. Because of this, I see that the Ethereum Foundation has indeed proposed a series of actions recently, and the community has actually been skeptical of this matter before. Of course, there are some uncertain parts of this, such as the Ethereum Foundation's wording for this matter, they use "priority redefinition", which is reprioritization, which sounds more modest. But most people would think that this should be called Pivot, a twist, and a need to admit that the past was wrong. However, at least from the actual actions so far, I think the strategy of focusing on Layer 1 and abandoning the past Rollup Centric is the most common point at present.
The point of non-consensus, Dr. Zhou just mentioned, I think it still lies in the limit of the Ethereum Foundation's insistence on decentralization, and I feel that there is no consensus at present. In fact, many of Ethereum's inefficiencies can be traced back to their adherence to the principle of decentralization. For example, whether it is the execution layer or the consensus layer of the client, they all require decentralization and keep multiple sides supported. At the same time, they have long insisted on supporting Solo Staker, making the participation rate of individual stakers a very important goal. This also affects efficiency, as there are a lot of clients to coordinate. I've also been following Lido in the past.
I don't think the Ethereum Foundation has shown a clear attitude on this issue at the moment, such as no longer paying attention to the Solo Staker and thinking that it would be okay to focus on it. I feel that Ethereum was only compared to Bitcoin in the early days, and Bitcoin existed as a rebel against the global financial system for the first few years. Therefore, Ethereum has put a lot of emphasis on being anti-regulatory and anti-censorship from the very beginning. Compared with BTC, which has no subject, Ethereum has a subject, and is very worried about being found by regulators, and is generally very cautious. Over the past few years, something has happened to Solana that initially worried Ethereum. For example, Solana is clearly defined as a security by the SEC in 2023. The Ethereum Foundation used to be very concerned about this, but now it seems that even if it is defined as a security, it doesn't seem to be too much of a problem, and Solana is still doing well. I don't see a lot of discussion about the extent to which decentralization can be regressed or compromised. I think this is a key issue that will continue to affect Ethereum's efficiency in the medium to long term, and there is no consensus yet.
Ethereum reform event timeline
Alex：Ok。 We've just talked about so many issues, and we've talked about some of the consensus on these issues, from the community to the top of the Ethereum Foundation. So what countermeasures has been planned by Ethereum's leadership to address these issues that everyone has agreed upon? What is the approximate timeline for these countermeasures? For example, there are two recent events that everyone has been paying attention to: the first is that Vitalik mentioned that he hopes to achieve a tenfold scale of Ethereum by the end of the year this year; The other is the recent restructuring and layoffs of the Ethereum Foundation. What are the key events like this, in the eyes of the two of you? Is there a common expectation of when they will occur? Let's ask Dr. Zhou to talk about this question first.
Qi Zhou: First of all, the first one is about Ethereum's L1 scaling. You can see that Ethereum has launched a very clear roadmap on how to increase the current gas limit from about 30 million to say, 60 million, and gradually increase it, and they also have corresponding EIPs to make relevant improvements. Second, we also see that Ethereum's client, such as Geth, is also actively optimizing the current code. For example, recently we have seen a very interesting phenomenon, that is, all clients of Ethereum have implemented performance caching in some sense, that is, data caching. We were surprised to find that Geth's caching implementation hadn't been particularly effective in the last four or five years, but we didn't dig deeper. As a result, the current transaction execution speed is around 100 million gas per second. If the gas limit of a block is adjusted to 100 million or even 200 million, for example, 10 times is 300 million, then it may take 3 seconds to process the block of executed transactions, which may cause the block to time out. Because Ethereum has strict time limits on block generation, voting, execution and other aspects in a time of 12 seconds, it is very likely to time out.
Interestingly, Nethermind did some cache optimization techniques during the engineering implementation, and magically improved the performance by about 3 to 4 times to the level of 4 to 500 million gas per second, which is what we have measured and can reproduce so far. We've seen Geth release the latest improvements at the beginning of this month or at the end of last month, and we've reproduced them on the machine ourselves, achieving the same performance standards without modifying any of the specs (technical specifications) of the current consensus and execution layers. As you can see, Geth probably hasn't spent a lot of time optimizing in the last four or five years, and suddenly there's pressure to see that others are doing better, and they start to optimize dramatically, and there is a 4 to 5 times performance improvement at once. At the beginning, we saw Nethermind's 4 to 5 times performance improvement for all Ethereum clients, and at the time we thought they were using black magic or the data was inaccurate, only to find out later that everyone was not pressing themselves hard enough, and they were still in their comfort zone. Now we know that performance can actually go faster, and that's an improvement that happens under pressure. This also means that we have already verified that it is possible to increase Ethereum by 3 to 4 times, or even 10 times, in advance. Originally, it was thought that 100 million gas per second would time out if it was increased by 10 times, but now it seems that this is not a big problem. This is a very detailed angle, and it shows that this pressure is actually a very good step forward for Ethereum. Solana vs. Ethereum, although it didn't perform well this time, the end result may be that Ethereum continues to improve because of the competition, which is good progress for the entire industry.
Another one about layoffs, there are also some stories to share. We previously partnered with Portal Network, the official Ethereum project, which solves the problem of data storage after Ethereum scales. Ethereum's historical transaction data is about 300G to 400G, and the state data is also 300G to 400G, which adds up to about 1T. If the capacity is expanded by 10 times, the data will soon exceed 2 T, 3 T. The final goal is to store data without affecting decentralization, and at the same time reduce the overhead of validators and full nodes, so as to achieve a better decentralized scaling method. We worked closely with them for a year and a half to two years, and it turned out that on one Monday, they suddenly announced that the project had been cancelled and that all the full-time members were out of work. So we can see that there should be a lot of determination within Ethereum. All solutions that can't directly solve the problem of scaling are not their top priority at present. Ethereum's determination in this regard is enormous.
Lawrence: The timeline is only very sketchy at the moment, such as the 10x expansion of L1 in a year, and the goal of 100x expansion in 4 years or 2 years. What Dr. Zhou just talked about also illustrates the problems of Ethereum in the past: for example, the execution layer actually has more than 5 times the optimization at your fingertips, but it has not been done in the past few years. On the one hand, the countermeasure is to adjust the strategy and return L1 to the core strategy; On the other hand, there have been changes to the organisational structure, including the addition of two new executive directors, one by Wang Xiaowei and the other by Tomasz kajetan Stanczak, founder of Nethermind. Layoffs have also been intensively carried out in the past few days. This morning the Ethereum Foundation released a letter about the general outline of the budget, and some time ago the Foundation was reorganized and staffed. A more detailed timeline may be followed by more detailed actions. But for now, the two new executive directors are serving for two years, starting this year, and I think they should be of good help with Ethereum's scaling goals, especially improving L1 performance. Because the two of them have more R&D backgrounds than other researchers. Wang Xiaowei has been studying Ethereum scaling for a long time, and at that time he was studying sharding; Tomasz Stańczak's Nethermind client has shocked other Ethereum clients in recent times. I think the addition of these two is good for the performance improvement of Ethereum, and may bring more intuitive improvements.
Is Ethereum still worth looking forward to?
Alex: Considering everything we've just discussed, Ethereum has some issues but has also made a lot of improvements, and of course, it has its own advantages. Looking towards the future at this stage, do both of you still have confidence in Ethereum? I mean, in terms of it being a good investment asset. What are your reasons for being optimistic about it? Among the reasons you are optimistic about, which ones do you think the market is currently overlooking quite seriously? Dr. Zhou, please go ahead and answer first.
Qi Zhou: My view on Ethereum is cautiously optimistic. From an optimistic point of view, I think Ethereum is a very rare decentralized ecosystem with many developer communities to participate and contribute. In a way, he's also a very good result in our entire web3 industry. Including when I talk to a lot of studios that don't know much about crypto, everyone compares Ethereum to high-tech companies like Nvidia, Apple, and Tesla. In this regard, I think Ethereum has a very good foundation and network effects. Personally, I think it would be boring if we only had Bitcoin in our industry and didn't have all this new and interesting stuff.
If it's prudent, I think Ethereum, for some historical reasons, has a very desirable number of people who are driving. At the beginning, I got some very good market feedback, but when I gradually dealt with some real problems, I exposed some of my previous overly idealistic ideas. If the Foundation can't make a big change, or if it's not thorough enough, I think there will be some possibility of a backlash. I think a lot of times it's human nature, after all, they have reached such a height, and they still have to keep their original intentions and keep working hard to do things, which is also a very big challenge for them. So I'm still cautious about Ethereum in this regard.
Lawrence: I'm still more bullish on Ethereum, although not as bullish as last cycle. I think the first reason for optimism is that there are still a lot of excellent developers who have been building in the Ethereum ecosystem, like Dr. Zhou. I think this is a very key competitive advantage for Ethereum. Of course, there will be some new applications that may not choose Ethereum when choosing, and may go directly to Solana or Sui, but there are still a considerable number of early and early excellent developers who participate in the crypto market and still develop in the Ethereum or EVM ecosystem. I think this is an important factor in the long-term bullishness of Ethereum. The second point is that although many new application types in this round have happened to Solana first, the financial applications, including RWA, and then Ethena are also considered new applications, and HyperLiquid can also be barely counted, and we can see that some new developments in the DeFi field are still in the Ethereum ecosystem. Later, after the further implementation of regulatory relaxation, there may be more financial applications, and they may still choose Ethereum when they choose the chain. On the other hand, I think that in the short to medium term, we may soon see an improvement in Ethereum's performance or a reduction in fees. I think there will be a strong short-term equivalent to a strong over-bearish rally, that is, there may be a shift in the market's view of it in the short term.
But like Dr. Zhou, I am still cautious and optimistic. Although Ethereum said that there have been changes in the short and medium term, it is difficult to say whether the long-term route has really changed. For example, what happens after the two new executive directors end their two-year terms? And will some of the characteristics of Vitalik himself change in the future? It may become necessary to pay more attention to existing users, pay more attention to some indicators in the short term, and not completely pay attention to some illusory indicators in the medium and long term. I think that if these characteristics do not change, or if Vitalik's own influence on Ethereum continues to change, and his attitude will not change, maybe Ethereum will still be relatively competitive in the long run, such as Solana and Sui, and it will remain in a state that is still slow and too conservative in general. In this way, these competitive advantages brought by Ethereum's earlier round of online cycles, whether it is developers or the early laying of financial applications, will become less and less as the cycle passes. I think that if Ethereum is still so slow and conservative in the next cycle, it may not be a very worthwhile investment.
Under what circumstances would one increase their holdings of Ethereum?
Alex: OK, let's return to a question directly related to investment. The overall valuation level of Ethereum has been declining relative to Bitcoin. There are now some signs of positive changes. For both of you, what facts, data, or information in the future would give you enough confidence to choose to buy or increase your position, or raise Ethereum's level in the overall crypto asset allocation? What such facts, data, or information could that be?
Lawrence: Okay. I think that if you want to look at the data, if you want to look at the data, the data will be postponed too much, and it is likely that the price will increase more before the data increases. I'm looking forward to seeing Vitalik one day pop up and say we did wrong in the past, and then we're going to decide what to do now. I have a vague feeling now that everybody is telling him he's not doing the right thing, and he says we're going to walk around the way you say it's done. Vitalik's impact on Ethereum as a whole is unmatched. It may be that his influence will be weakened with the addition of two new executive directors, but he is still the person who has the most influence on Ethereum at the moment. The fact or message I'd like to see is that Vitalik himself has become more radical or that someone as relatively radical as Tomasz has more influence within Ethereum.
Another point is that I want Ethereum to make a mistake. I think they used to be too obsessed with not making mistakes, too much about making things that must be done for ten or a hundred years. It can be slow, but it must not be wrong, they are pursuing this a little too much. Dr. Zhou also mentioned just now that it is normal to make mistakes. Solana has been down so many times in the past, including new public chains, but Ethereum is still too cautious. I'd like to see Ethereum not be as cautious as it used to be, but become more aggressive. If I can see some signals like this from the decision-making level, I may increase my position. Of course, the main reason is that my own Ethereum position has been held and the proportion is not small, so I think more about the opportunity to increase my position.
Qi Zhou: I think in terms of valuation, the valuation of our industry is a completely new issue in itself. So when deciding to buy Ethereum, I will probably incorporate two main factors. One is a big market, in fact, Ethereum has reached such a big network effect, as long as they are taking the path in the practical direction, as long as they are not buying in hype, there should be some very good investment opportunities. After so many cycles, there are actually a lot of opportunities for Ethereum. The second is about whether Ethereum will be able to maintain their more pragmatic attitude to make the next decisions. There are actually some problems that I find very interesting, not just Ethereum, but all kinds of problems that a large organization and community will encounter. For example, the reason why many people go to FUD Ethereum this time is because everyone thinks that there are a lot of villains around Vitalik who are taking advantage of him or overselling. But some real community freshmen feel that Vitalik is a bit detached from the masses, resulting in information asymmetry, and there is too much noise around Vitalik, and there is no good way to identify good people or good people. I think it's an objective fact that any organization that reaches a certain size is bound to come up with a situation where it depends on how Vitalik builds a better team, listens to the community, and confronts the mistakes that may have been made.
But here I do have the idea that the process may need to be smoother. If something like Khrushchev had happened back then, it would have easily split the community. So in this regard, Vitalik may need more introspection and reflection. It is very important to identify and distinguish the voices in the community in this process, so that more people and more organizations can enter Ethereum more easily. And I also thought that Vitalik was designing Ethereum as a super-sovereign project at the time, and he felt that some of the ideologies were not quite in line with him, so he had a long-distance attitude. For example, Trump in the United States has done a lot of friendly things to Crypto this time, including banquets, various hearings, etc., and I feel that Vitalik is still holding a distance from this kind of activity. Although I see that he has been very active this time, and I see that he has been running around lately, when it comes to answering some sensitive questions, such as whether he wants to open an office in Hong Kong, whether he wants to attend Trump's party, or go to a hearing in the United States, I feel that he may still have some hesitation. I don't mean confrontation, but there may be some hesitation.
In fact, in this process, the entire ecological evolution of Ethereum cannot lack the support of many local communities, including the general public, the upper level, and the support of all aspects of regulation. I've read his blog before, and he probably has a lot of interaction with Russia, with Putin, because he's originally Russian. But later, after the Russian-Ukrainian war, he was extremely opposed to such a thing. Therefore, he said that he would not do this aspect of communication with the sovereign in the future. But I don't think it's a particularly practical attitude if it's a stick to death. We have a saying in China, that is, we should make more friends and less enemies. In this case, I think Ethereum still has a lot of room for performance in the future.
Alex: Okay. I would like to thank the two guests for their selfless sharing on this topic today, and I very much hope that we can invite you to express your views on more topics in the future. That's all for today's show. Thank you.
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Is Ethereum still worth watching: A comprehensive analysis of the logic
Original Title: "EP31: Rethinking Ethereum: What are the Bullish Reasons for ETH Now?"
Original Source: Mint Ventures
· Host: Alex, Research Partner at Mint Ventures
· Guests: Zhou Qi, Founder of EthStorage; Lawrence, Researcher at Mint Ventures
· Recording Date: 2025.6.5
· Disclaimer: The content discussed in this podcast does not represent the views of the institutions of the guests, and the projects mentioned do not constitute any investment advice.
Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we clarify facts, explore realities, and seek consensus in the WEB3 world through continuous questioning and deep thinking. We aim to clarify the logic behind the hot topics, provide insights that penetrate the events themselves, and introduce diverse perspectives.
Alex: In this episode, we have Dr. Zhou from EthStorage and our researcher Lawrence. Let's talk about a blue-chip target that crypto investors are very concerned about - Ethereum. We know that Ethereum's overall performance in this cycle has not been very good, and its exchange rate has consistently underperformed BTC, and it has not been able to match its rival Solana for most of the time. However, there have been many notable changes in Ethereum recently, such as Vitalik becoming very resolute in scaling Layer 1, and then restructuring the structure and laying off employees, showing a more pragmatic attitude on the whole. Is this an inflection point for Ethereum's reinvigorating price? Before we begin our formal discussion today, we would like to ask two of our guests to introduce themselves to our listeners. Dr. Zhou came first.
Zhou Qi: Hi, I'm Zhou Qi, the founder of EthStorage. I'm excited to share some of our insights on Ethereum today, including some of our recent work on Ethereum. In fact, in 17 or 18 years, we studied the entire Ethereum technology very deeply, including the scaling roadmap of Ethereum, from the previous Layer 2 to the current Layer 1, including participating in a lot of research work on Ethereum, and also got a lot of Ethereum support, including some research on DA, as well as some related research with OP Stack, and also won a lot of grants. So today we're really excited to share some of our relatively unique insights into this.
Lawrence: Hello everyone, I am Lawrence from Mint Ventures. I am very glad to be here today to discuss this issue with Dr. Zhou.
The reason why this round of Ethereum underperformed against BTC and SOL
Alex: So let's get to the point of today. Before discussing the bullish reasons for Ethereum to look forward to today, we can first sort out the problems that Ethereum is currently facing. In the eyes of the two, what are the main reasons why Ethereum has significantly underperformed BTC and Solana in this cycle? Otherwise, please ask Zhou Bo to share this question first.
Qi Zhou: I think there are several reasons. The first aspect is the roadmap of Ethereum as a whole, especially the roadmap with Layer 2 as the core, in fact, everyone finds that it is not so consistent with the core value of Ethereum. That's actually something I discussed with Vitalik when I met him at East Asia last month, and that's one of his thoughts. We can see that, for example, last year, before EIP 4844 was launched, Ethereum was still in a relatively deflationary state. However, when the 4844 upgrade was launched, the fee for L2 to submit data to Ethereum dropped significantly, and at the same time, many L2 values were not reflected in Ethereum itself. For example, many L2 projects, such as Base and Arbitrum, have received a lot of user fees, but these fees have not fed back the value of Ethereum itself. So there's a big incentive incompatibility.
Second, from the perspective of Ethereum itself, because it performed very well in the last cycle, it also affected its judgment in a sense, making it relatively slow in some aspects, such as engineering progress. At that time, there was no real challenger to Ethereum, whether it was Bitcoin or Solana. In this wave, many people complained that Ethereum was changing too slowly, and the roadmap was planned for a long time, but there was no actual engineering implementation. Each upgrade takes one to two years to be functional. In contrast to Solana's aggressive engineering advancements, Ethereum has always been a research-biased model that doesn't particularly prioritize engineering. This approach has caused a large lag in the overall development and upgrade roadmap of Ethereum. We have a lot of personal experience in this area, for example, we did a lot of EIPs for Ethereum in the past few years, including EthStorage itself, which we can talk about later. To sum up, there are mainly these two aspects.
Lawrence: The two points that Zhou Bo just talked about are also the two points I want to make. Another important point I think is that in this cycle, there are relatively few new business models or new innovations on the chain. The richness and activity of on-chain business have not improved much compared to 21 years, and even if we remove meme transactions overall, the activity and richness of on-chain business may have decreased slightly. On the contrary, the fundamentals on the BTC side have improved significantly. Therefore, in fact, the overall performance of all public chains is not good. Even Solana, which has performed better, is at least 50% away from its 21-year high compared to BTC, and 50% worse than the previous one. I think this is also a common problem encountered by all Layer1s in this round.
The other two points are what Dr. Zhou just mentioned. One issue that can be said to be a strategic issue for Ethereum in the last two or three years is this Layer2 strategy. I think to be quite frank, it can basically be judged as a failure. Another point, which I summarized, may be a long-term structural problem of Ethereum, and it is not yet a short- and medium-term strategic problem. I've seen a lot of criticism lately, especially one named Max Resnick, and I think it's pretty typical. Max, who had previously been a researcher at the Ethereum Foundation, switched to Solana at the end of '24 and went to Anza, the team that Solana Labs spun off to do R&D. In the past, when he was actually in the Ethereum Foundation, he did not support the rollup strategy, but supported the extension of Layer 1. He has some very sharp criticisms of Ethereum, such as the fact that he believes that the people who developed the Ethereum roadmap, Vitalik to be exact, specialize in blockchain and cryptography, and less on computers. In this way, for a long time in the past, there have been many deviations in Ethereum's judgment and research on how to improve the performance of the blockchain, which may be very basic and factual in his opinion, including deviations in direction. For example, the Ethereum Foundation has long argued that the bottleneck to Ethereum's performance improvement lies in the execution layer.
However, according to him, the bottleneck for performance improvement is obviously at the consensus layer. And he also mentioned that Vitalik, or the people who make the Ethereum roadmap, are too long-term, pursuing directions that seem relatively illusory at the moment, rather than focusing on current users. For example, Vitalik himself has been talking about privacy apps and social apps on his blog, but has talked less about DeFi. But in reality, DeFi has always been the one that exists and is used by the most people on the Ethereum mainnet. This issue was debated for a while in July or August last year, and Vitalik and several leading DeFi projects on Ethereum were talking about it. Including because of these reasons, Zhou Bo also mentioned just now, Ethereum's R&D efficiency is actually quite low. On the one hand, there is a large disconnect between the research team and the development team, and there is a large gap between what the research team studies and what the development team develops. On the other hand, its R&D progress is really slow, basically only one major upgrade a year. In fact, Vitalik may have started to mention this matter in 15 or 16 years, but it was not until the Shanghai upgrade in 23 years that this matter was officially closed. In the past, there weren't many upgrades that people could call after '21: Merge '22, Shanghai '23, Cancun last year, and Pectra just past.
Overall, the development schedule is very slow, which makes it very expensive to correct errors, especially time. For example, the Layer2 strategy problem just mentioned, in the case of Ethereum, is: in 2020, Vitalik proposed to focus on Rollup, but in fact, it was not until 2022 that related things were implemented, and now in 2025, everyone found that it was not possible and needed to change. There's a lot of time wasted in between. Especially compared to the likes of Solana and some new Layer 1s, such as Sui, the gap between their R&D schedules is close to an order of magnitude of efficiency. In other words, Ethereum may have to take 10 times as long as other public chains to make a decision and push this thing online. Of course, I think there is a reason for this, because Ethereum is the first more influential public chain after Bitcoin, and it faces many problems, including many previous regulatory considerations, and then it has always insisted on decentralization relatively speaking. However, judging from the results, I think that the problems just mentioned are a long-term structural problem that belongs to the Ethereum Foundation or the core layer of Ethereum, that is, the people who make the Ethereum roadmap. I probably think that's the main thing.
Alex: Okay, I might want to add one more point. In fact, Lawrence also mentioned that the concept of the top level of the Ethereum Foundation is very persistent in the insistence on decentralization. Until the last cycle, this was considered one of the elements of blockchain legitimacy. But there have been quite a few changes in this round. One of the most important changes is that there has been a big change in the leadership of the US administration. This round of the U.S. government is very pro-crypto and very loosely regulated. As a result, at least in this cycle of administration, the encirclement of crypto projects and the fight against censorship have become less urgent. Ethereum's high obsession with decentralization has become less necessary in this government cycle. On the contrary, like Sol and Sui, they may not have a high degree of decentralization, but their efficiency and performance are very good, which has become an advantage.
And in the long run, I feel that even if the next administration changes to the Democratic Party, the Democratic Party will realize that the vote base of crypto investors on the US side is very important. Under such a premise, I believe that they will not be as brutal as Gary Gensler's last round of encirclement of crypto projects during their tenure. Therefore, the necessity of decentralization is gradually decreasing with the changes in the industry. We see that many projects that have actually emerged in this round, such as Ethena, including RWA, a narrative that many investors think is very important, are actually the products of the combination of CeFi and DeFi, which is the general trend. The decline in the importance of this narrative has actually weakened Ethereum's consensus to a certain extent. This is one of the reasons why this round is not as narratively better than SOL.
Consensus and Non-consensus on Ethereum Issues
Alex: Let's move on to the next question. We've just talked a lot about Ethereum, including its engineering capabilities, some understanding of its development direction, the slow pace of error correction, and so on. So with so many questions asked, what is the consensus among Ethereum leaders, the community, and developers on these issues? What are the non-consensuses? To put it more simply, what are the issues that everyone from Ethereum's core management to the community and developers agree to be problems? Which ones are divisive? Let's say we think it's a problem, a hindrance, but Ethereum's current attitude is that it's not a problem, it's a feature that we're very concerned about. What do you think about this? Let's start with Dr. Zhou.
Qi Zhou: I think one of the most important points in this wave is that there has been a very big change in Ethereum's definition of decentralization. I can say that a few years ago, Ethereum had a very idealistic, even somewhat religiously fanatical, approach to decentralization. I remember talking to some people in Ethereum at the time, and they said that they wanted Ethereum L1 to be a minimal layer of trust, so that something like a mobile phone, or even a very simple embedded device, could run an Ethereum validator. But it's clear that this time, after challenges such as Solana, especially in the upgrade roadmap for L1 scaling, including increasing the gas limit and introducing block-level access lists to speed up transactions at the execution layer, they are actually looking for a more practical way to find a trade-off between decentralization and execution efficiency. This also means that we may need a slightly more powerful computer.
The immediate problem is that you now design an Ethereum consensus and let a mobile phone or a 100 yuan device run the validator, but you need at least 32 Ethereum. At the current price, it's probably nearly 100,000. This is actually a mismatch. Your device isn't the bottleneck that causes the validator, it's just that you need to have too much Ethereum. So under this premise, why can't this assumption be loosened? For example, can we make computers worth $1,000, $2,000, or $3,000 run nodes, and at the same time, Ethereum's L1 throughput can be doubled, tripled, or even scaled by 10x? This is Ethereum's next plan. This is a very pragmatic adjustment of Ethereum's search for decentralization and execution efficiency. For example, we submitted a proposal to Ethereum two years ago, which is the ESP grant. We'd like to look into the block-level access list. What it means is that when I pack a block, I can tell other validators what data I access when I execute those transactions. In this way, they can use the technology of pre-access to perform high-concurrency pre-reading of randomly accessed data such as account balances in advance, which greatly improves the execution efficiency.
Two years ago, we only applied for $10,000 to study this issue, and we felt that this research was valuable and helpful for Ethereum, but it was rejected without explaining why. Our guess is because Ethereum feels that this may have an impact on decentralization, not top priority. But at the beginning of this year, they suddenly said that they wanted to do this kind of research and that we were welcome to participate. This shows that Ethereum's paradigm has shifted from the ideal concept of decentralization two years ago to a more pragmatic perspective. Especially with the increase in computer performance and the decrease in cost, it is still roughly in line with Moore's Law. If Ethereum still follows the original design framework and does not dynamically adjust the gas limit, or does not dynamically add the block level access list, then the execution efficiency cannot be released, and it is difficult to achieve the possibility of tenfold scaling, for example. I'm surprised, two or three years ago I wondered why they didn't think about it. I can only understand it in terms of their insistence on idealism.
On the non-consensus part, I think Ethereum is still burdened with a lot of "debt" - including technical debt, cognitive debt, and even brand debt. That is to say, when it is going to carry out a major reform, many times it cannot directly deny itself. Historically, such as China's reform and opening up and the transition of some leaders in the Soviet Union, we can see that slow but firm reforms are more effective than completely overthrowing the past. As an example, Ethereum now has a multi-client roadmap. At both the execution and consensus levels, there are clients written in four or five different languages. Historically, we've seen particularly successful infrastructure software, such as Solana itself, the Linux operating system, HDFS, etc., basically implemented in one language, one set of testing frameworks. What they're looking for is engineering efficiency. Ethereum, on the other hand, has experienced a DAO attack and predicted that it might use a language, and some mechanisms will be introduced due to the vulnerabilities of this language, which will lead to downtime. Because Ethereum is still changing very fast, unlike Bitcoin, many functions have been relatively solidified.
So they'd rather spend ten times as much work to prevent this risk. But doing so would require five to ten times the engineering effort of Ethereum to keep up with Solana. That's why Ethereum is so slow with every upgrade. We've been personally involved in the upgrade process of Ethereum, including EIP development, DevNet, and TestNet, and will find that it takes a lot of effort to coordinate implementations between different clients. For example, in this Pectra upgrade, it was found that Geth was inconsistent with other client configurations, resulting in out-of-sync and had to be repaired immediately, and finally found that the problem was with Geth. It's a trade-off, and it takes a lot of effort to do it.
So here I am thinking about a question: Is it necessary that a fast-changing software like Ethereum must not go down? Solana has been down several times, as have other projects. Maybe we can allow downtime, but the recovery is fast. By maintaining only one client at the same time, you can iterate faster. It's really a software engineering problem. I've seen that Ethereum has also been recruiting for example, Lead Performance Developers, for example, to focus more on solving schedule issues more efficiently from an engineering perspective. I've been in big factories and know that downtime is the norm. Even if you have money and engineers, you often have problems. It's not uncommon for us to talk about how many times our systems have been down, such as Meta or Google, which have been completely inaccessible for an hour. Therefore, how to overcome these problems is an issue that deserves in-depth discussion, and it is also an aspect in which there is still no consensus.
Lawrence: I understand that the current consensus is that the strategy of focusing on Layer 2 in the past is to shift. Because of this, I see that the Ethereum Foundation has indeed proposed a series of actions recently, and the community has actually been skeptical of this matter before. Of course, there are some uncertain parts of this, such as the Ethereum Foundation's wording for this matter, they use "priority redefinition", which is reprioritization, which sounds more modest. But most people would think that this should be called Pivot, a twist, and a need to admit that the past was wrong. However, at least from the actual actions so far, I think the strategy of focusing on Layer 1 and abandoning the past Rollup Centric is the most common point at present.
The point of non-consensus, Dr. Zhou just mentioned, I think it still lies in the limit of the Ethereum Foundation's insistence on decentralization, and I feel that there is no consensus at present. In fact, many of Ethereum's inefficiencies can be traced back to their adherence to the principle of decentralization. For example, whether it is the execution layer or the consensus layer of the client, they all require decentralization and keep multiple sides supported. At the same time, they have long insisted on supporting Solo Staker, making the participation rate of individual stakers a very important goal. This also affects efficiency, as there are a lot of clients to coordinate. I've also been following Lido in the past.
I don't think the Ethereum Foundation has shown a clear attitude on this issue at the moment, such as no longer paying attention to the Solo Staker and thinking that it would be okay to focus on it. I feel that Ethereum was only compared to Bitcoin in the early days, and Bitcoin existed as a rebel against the global financial system for the first few years. Therefore, Ethereum has put a lot of emphasis on being anti-regulatory and anti-censorship from the very beginning. Compared with BTC, which has no subject, Ethereum has a subject, and is very worried about being found by regulators, and is generally very cautious. Over the past few years, something has happened to Solana that initially worried Ethereum. For example, Solana is clearly defined as a security by the SEC in 2023. The Ethereum Foundation used to be very concerned about this, but now it seems that even if it is defined as a security, it doesn't seem to be too much of a problem, and Solana is still doing well. I don't see a lot of discussion about the extent to which decentralization can be regressed or compromised. I think this is a key issue that will continue to affect Ethereum's efficiency in the medium to long term, and there is no consensus yet.
Ethereum reform event timeline
Alex：Ok。 We've just talked about so many issues, and we've talked about some of the consensus on these issues, from the community to the top of the Ethereum Foundation. So what countermeasures has been planned by Ethereum's leadership to address these issues that everyone has agreed upon? What is the approximate timeline for these countermeasures? For example, there are two recent events that everyone has been paying attention to: the first is that Vitalik mentioned that he hopes to achieve a tenfold scale of Ethereum by the end of the year this year; The other is the recent restructuring and layoffs of the Ethereum Foundation. What are the key events like this, in the eyes of the two of you? Is there a common expectation of when they will occur? Let's ask Dr. Zhou to talk about this question first.
Qi Zhou: First of all, the first one is about Ethereum's L1 scaling. You can see that Ethereum has launched a very clear roadmap on how to increase the current gas limit from about 30 million to say, 60 million, and gradually increase it, and they also have corresponding EIPs to make relevant improvements. Second, we also see that Ethereum's client, such as Geth, is also actively optimizing the current code. For example, recently we have seen a very interesting phenomenon, that is, all clients of Ethereum have implemented performance caching in some sense, that is, data caching. We were surprised to find that Geth's caching implementation hadn't been particularly effective in the last four or five years, but we didn't dig deeper. As a result, the current transaction execution speed is around 100 million gas per second. If the gas limit of a block is adjusted to 100 million or even 200 million, for example, 10 times is 300 million, then it may take 3 seconds to process the block of executed transactions, which may cause the block to time out. Because Ethereum has strict time limits on block generation, voting, execution and other aspects in a time of 12 seconds, it is very likely to time out.
Interestingly, Nethermind did some cache optimization techniques during the engineering implementation, and magically improved the performance by about 3 to 4 times to the level of 4 to 500 million gas per second, which is what we have measured and can reproduce so far. We've seen Geth release the latest improvements at the beginning of this month or at the end of last month, and we've reproduced them on the machine ourselves, achieving the same performance standards without modifying any of the specs (technical specifications) of the current consensus and execution layers. As you can see, Geth probably hasn't spent a lot of time optimizing in the last four or five years, and suddenly there's pressure to see that others are doing better, and they start to optimize dramatically, and there is a 4 to 5 times performance improvement at once. At the beginning, we saw Nethermind's 4 to 5 times performance improvement for all Ethereum clients, and at the time we thought they were using black magic or the data was inaccurate, only to find out later that everyone was not pressing themselves hard enough, and they were still in their comfort zone. Now we know that performance can actually go faster, and that's an improvement that happens under pressure. This also means that we have already verified that it is possible to increase Ethereum by 3 to 4 times, or even 10 times, in advance. Originally, it was thought that 100 million gas per second would time out if it was increased by 10 times, but now it seems that this is not a big problem. This is a very detailed angle, and it shows that this pressure is actually a very good step forward for Ethereum. Solana vs. Ethereum, although it didn't perform well this time, the end result may be that Ethereum continues to improve because of the competition, which is good progress for the entire industry.
Another one about layoffs, there are also some stories to share. We previously partnered with Portal Network, the official Ethereum project, which solves the problem of data storage after Ethereum scales. Ethereum's historical transaction data is about 300G to 400G, and the state data is also 300G to 400G, which adds up to about 1T. If the capacity is expanded by 10 times, the data will soon exceed 2 T, 3 T. The final goal is to store data without affecting decentralization, and at the same time reduce the overhead of validators and full nodes, so as to achieve a better decentralized scaling method. We worked closely with them for a year and a half to two years, and it turned out that on one Monday, they suddenly announced that the project had been cancelled and that all the full-time members were out of work. So we can see that there should be a lot of determination within Ethereum. All solutions that can't directly solve the problem of scaling are not their top priority at present. Ethereum's determination in this regard is enormous.
Lawrence: The timeline is only very sketchy at the moment, such as the 10x expansion of L1 in a year, and the goal of 100x expansion in 4 years or 2 years. What Dr. Zhou just talked about also illustrates the problems of Ethereum in the past: for example, the execution layer actually has more than 5 times the optimization at your fingertips, but it has not been done in the past few years. On the one hand, the countermeasure is to adjust the strategy and return L1 to the core strategy; On the other hand, there have been changes to the organisational structure, including the addition of two new executive directors, one by Wang Xiaowei and the other by Tomasz kajetan Stanczak, founder of Nethermind. Layoffs have also been intensively carried out in the past few days. This morning the Ethereum Foundation released a letter about the general outline of the budget, and some time ago the Foundation was reorganized and staffed. A more detailed timeline may be followed by more detailed actions. But for now, the two new executive directors are serving for two years, starting this year, and I think they should be of good help with Ethereum's scaling goals, especially improving L1 performance. Because the two of them have more R&D backgrounds than other researchers. Wang Xiaowei has been studying Ethereum scaling for a long time, and at that time he was studying sharding; Tomasz Stańczak's Nethermind client has shocked other Ethereum clients in recent times. I think the addition of these two is good for the performance improvement of Ethereum, and may bring more intuitive improvements.
Is Ethereum still worth looking forward to?
Alex: Considering everything we've just discussed, Ethereum has some issues but has also made a lot of improvements, and of course, it has its own advantages. Looking towards the future at this stage, do both of you still have confidence in Ethereum? I mean, in terms of it being a good investment asset. What are your reasons for being optimistic about it? Among the reasons you are optimistic about, which ones do you think the market is currently overlooking quite seriously? Dr. Zhou, please go ahead and answer first.
Qi Zhou: My view on Ethereum is cautiously optimistic. From an optimistic point of view, I think Ethereum is a very rare decentralized ecosystem with many developer communities to participate and contribute. In a way, he's also a very good result in our entire web3 industry. Including when I talk to a lot of studios that don't know much about crypto, everyone compares Ethereum to high-tech companies like Nvidia, Apple, and Tesla. In this regard, I think Ethereum has a very good foundation and network effects. Personally, I think it would be boring if we only had Bitcoin in our industry and didn't have all this new and interesting stuff.
If it's prudent, I think Ethereum, for some historical reasons, has a very desirable number of people who are driving. At the beginning, I got some very good market feedback, but when I gradually dealt with some real problems, I exposed some of my previous overly idealistic ideas. If the Foundation can't make a big change, or if it's not thorough enough, I think there will be some possibility of a backlash. I think a lot of times it's human nature, after all, they have reached such a height, and they still have to keep their original intentions and keep working hard to do things, which is also a very big challenge for them. So I'm still cautious about Ethereum in this regard.
Lawrence: I'm still more bullish on Ethereum, although not as bullish as last cycle. I think the first reason for optimism is that there are still a lot of excellent developers who have been building in the Ethereum ecosystem, like Dr. Zhou. I think this is a very key competitive advantage for Ethereum. Of course, there will be some new applications that may not choose Ethereum when choosing, and may go directly to Solana or Sui, but there are still a considerable number of early and early excellent developers who participate in the crypto market and still develop in the Ethereum or EVM ecosystem. I think this is an important factor in the long-term bullishness of Ethereum. The second point is that although many new application types in this round have happened to Solana first, the financial applications, including RWA, and then Ethena are also considered new applications, and HyperLiquid can also be barely counted, and we can see that some new developments in the DeFi field are still in the Ethereum ecosystem. Later, after the further implementation of regulatory relaxation, there may be more financial applications, and they may still choose Ethereum when they choose the chain. On the other hand, I think that in the short to medium term, we may soon see an improvement in Ethereum's performance or a reduction in fees. I think there will be a strong short-term equivalent to a strong over-bearish rally, that is, there may be a shift in the market's view of it in the short term.
But like Dr. Zhou, I am still cautious and optimistic. Although Ethereum said that there have been changes in the short and medium term, it is difficult to say whether the long-term route has really changed. For example, what happens after the two new executive directors end their two-year terms? And will some of the characteristics of Vitalik himself change in the future? It may become necessary to pay more attention to existing users, pay more attention to some indicators in the short term, and not completely pay attention to some illusory indicators in the medium and long term. I think that if these characteristics do not change, or if Vitalik's own influence on Ethereum continues to change, and his attitude will not change, maybe Ethereum will still be relatively competitive in the long run, such as Solana and Sui, and it will remain in a state that is still slow and too conservative in general. In this way, these competitive advantages brought by Ethereum's earlier round of online cycles, whether it is developers or the early laying of financial applications, will become less and less as the cycle passes. I think that if Ethereum is still so slow and conservative in the next cycle, it may not be a very worthwhile investment.
Under what circumstances would one increase their holdings of Ethereum?
Alex: OK, let's return to a question directly related to investment. The overall valuation level of Ethereum has been declining relative to Bitcoin. There are now some signs of positive changes. For both of you, what facts, data, or information in the future would give you enough confidence to choose to buy or increase your position, or raise Ethereum's level in the overall crypto asset allocation? What such facts, data, or information could that be?
Lawrence: Okay. I think that if you want to look at the data, if you want to look at the data, the data will be postponed too much, and it is likely that the price will increase more before the data increases. I'm looking forward to seeing Vitalik one day pop up and say we did wrong in the past, and then we're going to decide what to do now. I have a vague feeling now that everybody is telling him he's not doing the right thing, and he says we're going to walk around the way you say it's done. Vitalik's impact on Ethereum as a whole is unmatched. It may be that his influence will be weakened with the addition of two new executive directors, but he is still the person who has the most influence on Ethereum at the moment. The fact or message I'd like to see is that Vitalik himself has become more radical or that someone as relatively radical as Tomasz has more influence within Ethereum.
Another point is that I want Ethereum to make a mistake. I think they used to be too obsessed with not making mistakes, too much about making things that must be done for ten or a hundred years. It can be slow, but it must not be wrong, they are pursuing this a little too much. Dr. Zhou also mentioned just now that it is normal to make mistakes. Solana has been down so many times in the past, including new public chains, but Ethereum is still too cautious. I'd like to see Ethereum not be as cautious as it used to be, but become more aggressive. If I can see some signals like this from the decision-making level, I may increase my position. Of course, the main reason is that my own Ethereum position has been held and the proportion is not small, so I think more about the opportunity to increase my position.
Qi Zhou: I think in terms of valuation, the valuation of our industry is a completely new issue in itself. So when deciding to buy Ethereum, I will probably incorporate two main factors. One is a big market, in fact, Ethereum has reached such a big network effect, as long as they are taking the path in the practical direction, as long as they are not buying in hype, there should be some very good investment opportunities. After so many cycles, there are actually a lot of opportunities for Ethereum. The second is about whether Ethereum will be able to maintain their more pragmatic attitude to make the next decisions. There are actually some problems that I find very interesting, not just Ethereum, but all kinds of problems that a large organization and community will encounter. For example, the reason why many people go to FUD Ethereum this time is because everyone thinks that there are a lot of villains around Vitalik who are taking advantage of him or overselling. But some real community freshmen feel that Vitalik is a bit detached from the masses, resulting in information asymmetry, and there is too much noise around Vitalik, and there is no good way to identify good people or good people. I think it's an objective fact that any organization that reaches a certain size is bound to come up with a situation where it depends on how Vitalik builds a better team, listens to the community, and confronts the mistakes that may have been made.
But here I do have the idea that the process may need to be smoother. If something like Khrushchev had happened back then, it would have easily split the community. So in this regard, Vitalik may need more introspection and reflection. It is very important to identify and distinguish the voices in the community in this process, so that more people and more organizations can enter Ethereum more easily. And I also thought that Vitalik was designing Ethereum as a super-sovereign project at the time, and he felt that some of the ideologies were not quite in line with him, so he had a long-distance attitude. For example, Trump in the United States has done a lot of friendly things to Crypto this time, including banquets, various hearings, etc., and I feel that Vitalik is still holding a distance from this kind of activity. Although I see that he has been very active this time, and I see that he has been running around lately, when it comes to answering some sensitive questions, such as whether he wants to open an office in Hong Kong, whether he wants to attend Trump's party, or go to a hearing in the United States, I feel that he may still have some hesitation. I don't mean confrontation, but there may be some hesitation.
In fact, in this process, the entire ecological evolution of Ethereum cannot lack the support of many local communities, including the general public, the upper level, and the support of all aspects of regulation. I've read his blog before, and he probably has a lot of interaction with Russia, with Putin, because he's originally Russian. But later, after the Russian-Ukrainian war, he was extremely opposed to such a thing. Therefore, he said that he would not do this aspect of communication with the sovereign in the future. But I don't think it's a particularly practical attitude if it's a stick to death. We have a saying in China, that is, we should make more friends and less enemies. In this case, I think Ethereum still has a lot of room for performance in the future.
Alex: Okay. I would like to thank the two guests for their selfless sharing on this topic today, and I very much hope that we can invite you to express your views on more topics in the future. That's all for today's show. Thank you.