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It's been a challenging few years for the Ethereum ecosystem but these last few months have been particularly brutal. Where should Ethereum go next? Today's Issue ⬇️ - ☀️ Need to Know: Oregon vs. COIN
The state's AG takes up Biden's cause. - 🗣️ Analysis: Ethereum's Pivot
What ETH needs to push forward. - 🎧 Early Access: The Plan ETH Needs
Can we turn the Ethereum ship around?
Sponsor: Uphold — Buy, swap & hold 300+ crypto. Capital at risk. . . . NEED TO KNOW Oregon Coming for COIN - 👨⚖️ Oregon AG Sues Coinbase After SEC Drops Case. Months after Trump's inauguration signaled a regulatory shift in federal attitudes toward crypto, Oregon's attorney general is reviving Biden-era arguments.
- 🇰🇵 No-KYC Exchange eXch Shuts Down Amid Prosecutorial Threats. The exchange had come under heavy criticism after its alleged use by Lazarus Group to move hacked Bybit funds.
- 🟠 Arizona Gov. Threatening Veto of Bitcoin Reserve Bill. The Democratic governor said that until legislators pass disability funding, she will be vetoing all other bills that come to her desk.
📸 Daily Market Snapshot: After a month of big swings, crypto had a relatively stable week of trading with BTC trading within a relatively tight range even as volatility reigned supreme on public markets. | Prices as of 3pm ET | 24hr | 7d |  | Crypto $2.66T | ↘ 0.6% | ↗ 1.1% |  | BTC $84,564 | ↘ 1.0% | ↗ 0.8% |  | ETH $1,592 | ↘ 1.1% | ↗ 1.3% | . . . ANALYSIS Ethereum’s Strategic Pivot The gargantuan ship of Ethereum is slowly turning itself around. Since 2023, a sense of urgency has been building within the Ethereum community concerning the need to change. Now, pinpointing the issues and determining how that change needs to occur has been its own challenge. Ethereum is comprised of many different components, with different voices and incentives contributing to the conversation of where it goes next. Coordinating this conversation and finding consensus has never been easy. This week, I recorded an episode with Ansgar and Dankrad, researchers from the Ethereum Foundation, with help from fellow podcaster Mike Ippolito. Dankrad and Ansgar have already made a lot of progress in defining the problem space while identifying ways that the community can fix said problems. This episode is out now on the premium feed! Below, we aim to digest their progress into a quick-and-dirty framework for understanding where Ethereum is falling short and what is already being done to put the ship on the right path.
Ethereum’s Strategic MisalignmentAt the core of Ethereum’s issues is a misalignment between long-term ideals and short-term execution. Ethereum has always been long-term research-oriented, and with the absence of real competitive pressures for most of its history, the downsides of this have never been an issue. However, in 2021, the environment changed. Crypto graduated to becoming real, and the luxury of being a peace-time research project became Ethereum’s greatest weakness, exploited by its competition. There isn't one central issue defining Ethereum’s problem space – it has many complex challenges. The network's structural over-indexing on long-term ideals has led to breakdowns across its techno-social stack. Here are the most notable problem areas identified in our conversations with Dankrad and Ansgar: - L1 Underinvestment
- Product Mindset Deficiency
- Leadership Vacuum
- Ivory Tower Culture
- L2 Fragmentation
- Slow Adaptation
Blocking and TacklingThose are some big problems to tackle. But the good news is that, to realign Ethereum towards successful outcomes, all it needs to do is return to basics – promoting user experience, scale, developer support, and stronger coordination. A little operational discipline will go a long way, and Ethereum has already made progress across all of the fronts that were previously giving malaise. Each of the above vectors is already being addressed head-on: 1️⃣ Aggressive L1 Scaling PlanEthereum is finally reinvesting in Layer 1 growth. There is an updated roadmap with more aggressive scaling plans. Ethereum currently wants to increase gas limits 10x over 2 years. It has tricks to create instantaneous transactions: - Performance-Enhancing Upgrades: In the short term, Ethereum is targeting a jump from 36 million gas to 100 million by the end of 2024. In the medium term, the Glamsterdam hard fork (~1.5 years out) aims to push that even further to 300 million gas via upgrades like delayed execution and access lists.
- zk-Based Systems to Scale L1: The biggest unlock comes from zkVMs, which shifts the L1 itself toward rollup-like architecture and scale. With zkVMs, nodes verify succinct proofs instead of re-executing transactions. Potentially live in late 2025, the Ethereum L1 will grow at 100x capacity without sacrificing decentralization. What was once long-term research is now a medium-term engineering problem.
2️⃣ User-Centric DevelopmentEthereum is evolving from a protocol-first mindset to treating itself as a product. New leadership and internal roles (e.g., Josh Rudolf) are being empowered to prioritize UX and developer needs. 3️⃣ Leadership Vacuum → Strategic DirectionHistorically a passive funder, the Ethereum Foundation is now stepping up as a strategic coordinator. The appointment of co-executive directors Tomasz Stańczak and Hsiao-Wei Wang marks a new era of accountability, direction, and internal cohesion. 4️⃣ Opening the Doors to the Ivory TowerThe Ethereum Foundation is de-emphasizing its closed-door, research-heavy culture. Internal discussions are now more inclusive, and ecosystem voices are being actively welcomed into roadmap and product conversations. Communication across the organization has notably improved. 5️⃣ Better Interop + Based/Native RollupsEthereum is developing interoperability standards and shared tooling while incentivizing tighter L1 integrations via based and native rollups. The culture around Ethereum is shifting from alignment-cudgeling to positioning Ethereum L1 as a service provider to L2s. 6️⃣ Slow Adaptation to Competitive PressureEthereum is acknowledging the need for more urgency with protocol upgrades. Ethereum is now embracing shorter roadmap cycles and execution urgency. Originally, Ethereum’s adaptability stood in contrast to Bitcoin’s rigidity. Now, Ethereum is understanding the need for meta-adaptation – adapting the roadmap to fit current demands.
Ethereum's 'Pivot' Cheat SheetThe purpose of this post is to distill and clarify the strategic changes happening in Ethereum, so that the broader community can get onboard, and we can move the conversation forward more rapidly. In pursuit of that goal, here is a cheat sheet! For those wanting to dive deeper into the problem space and hear from Ansgar and Dankrad directly, our episode discussing Ethereum re-alignment has just gone live in Early Access for Citizens (watch here). For free listeners, check your podcast feed next week! A big takeaway from the episode with Ansgar and Dankrad: the EF is stepping up to fulfill its end of the bargain. Now, the Ethereum community has a role to play in its evolution, too. Parts of the Ethereum community have been pushing for this shift, while others have been resisting it. Ethereum is a big tent that holds space for many different voices. There is no homogenous "Ethereum community," but rather a diverse set of voices on a spectrum of competing or aligned visions for what Ethereum could be. As Ethereum adapts, so will the Ethereum community. Our voices need to change with it. The messaging around Ethereum needs to update to reflect the changes being made. I have an IPA-fueled article that comes out next week that offers my vision on what Ethereum messaging should look like to align with some of the changes identified in this article. Stay tuned, I’m excited for it to come out! David
Explore +300 assets on Uphold. Trade, swap & hold — all in one place. In the US? Earn rewards, including rewards on stablecoins, exclusive insights, and early token access—just by staying active. Terms apply. Don’t invest unless you’re prepared to lose all the money you invest. . . . EARLY ACCESS The Plan Ethereum Needs Ethereum Foundation researchers Dankrad Feist and Ansgar Dietrichs join David Hoffman and Michael Ippolito to discuss Ethereum’s identity crisis—and how it’s turning the ship around.
They break down Ethereum’s cultural and organizational challenges, the pivot toward L1 growth, and the evolving role of the Ethereum Foundation under new leadership. The conversation covers the future of based and native rollups, L2 alignment, and why Ethereum’s unique values still matter in a competitive landscape. Listen to the full episode in Early Access👇 | 
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