The Founder of Bankless is Maneuvering the 'Giant Ship Ethereum'

Ethereum, the second largest cryptocurrency in the world by market capitalization, is at a crossroads. Once praised for its forward-thinking approach, relentless focus on long term research, and advanced innovation, Ethereum is facing increasing competitive pressure and internal challenges. With Bitcoin's dominance over 60% and the price of ETH dropping nearly 70% from its all-time high three years ago, the Ethereum ship seems to have run aground. Fortunately, its passionate community is rallying to adjust its course. In the article titled Ethereum's Strategic Pivot, David Hoffman of Bankless explored the key challenges of Layer 1 and provided insights into steering the "giant ship Ethereum". How Has Ethereum Gone Off Course? The decentralized structure of Ethereum combines multiple voices and motivations, making achieving consensus a complex task. It reacts slowly to changing market dynamics, and the urgency within the community to adapt has increased. However, identifying issues and coordinating solutions is a long term task. Hoffman has exchanged ideas with researchers from the Ethereum Foundation, Ansgar Dietrichs and Dankrad Feist, to outline some core issues that the blockchain is facing, including insufficient investment in Layer 1. The story of Ethereum's scalability has long been dominated by Layer 2. However, countless competing rollups developing individually pose interoperability challenges that even the most steadfast ETH maxis find overwhelming. Dietrichs and Feist argue that Ethereum should refocus on scaling and improving its base layer, while also pursuing a product-first approach that prioritizes user experience and adapts more quickly to the rapidly developing industry with many competitive threats. The lack of leadership within Ethereum has resulted in a lack of clear direction and accountability for the mistakes of the parent chain, and the "ivory tower" culture has led to closed research activities that stifle open collaboration and result in inefficiency. All these challenges have caused Ethereum to go off course. As CryptoSlate recently reported, its market dominance has fallen to a five-year low, dropping below 8% as alternative blockchains attract users with lower fees and faster transactions. Even as Layer-2 solutions improve efficiency, they also draw activity away from the main network, reducing network revenue and threatening Ethereum's competitive advantage. Strategic Restructuring – Where Will Ethereum Go From Here Despite the not-so-promising outlook, Hoffman and the guests from Bankless remain optimistic about the future of Ethereum, presenting a series of strategic turning points to revive the network. One major initiative is aggressive Layer 1 scaling, with plans to increase the gas limit tenfold over the next two years. Short-term upgrades target an increase from 36 million to 100 million gas by the end of 2024, while the upcoming Glamsterdam hard arm aims to push this figure to 300 million. The integration of zk-based systems (zkVM) could ultimately expand Layer 1 capacity by 100 times without affecting decentralization, turning long-term research ambitions into short-term technical goals. Along with these technical upgrades, the ETH community is shifting from a protocol-focused mindset to a product-focused mindset, emphasizing user experience and developer support. Leadership and coordination are also receiving new attention, with the Ethereum Foundation appointing new concurrent executives, Tomasz Stańczak and Hsiao-Wei Wang, to provide stronger direction and internal cohesion. Ethereum is also working to standardize interoperability and encourage deeper integration between Layer 1 and Layer 2 solutions, positioning itself as a service provider for L2. Recognizing the more urgent needs, the network is also adopting shorter roadmap cycles. Pectra Upgrade And More The upcoming Pectra upgrade, scheduled for May 7, is the focus of these changes. Pectra promises to enhance wallet features, reduce transaction costs, and improve overall scalability, restoring on-chain activity and rebuilding trust in the ecosystem. Industry leaders believe these improvements could be a catalyst for new growth, potentially bringing Ethereum back to the $3,000 mark. The next upgrades, such as PeerDAS and Fusaka, are planned to expand data availability and reduce L2 transaction costs. However, as reported by CryptoSlate, the ability to support a thriving L2 ecosystem of Ethereum depends on ongoing technical advancements. Hoffman emphasized that the leadership changes at the Ethereum Foundation are just one part of the equation. The larger ETH community must also adapt, update its messaging, and align its vision with the platform's evolving strategy. As you said: "Ethereum is a big tent that holds space for many different voices." The challenge ahead is to harness that diversity and steer the ship towards a more scalable, user-friendly, and competitive future—or remain adrift in the open sea, staggering between the waves.