TL; DR
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The Ethereum user/developer/investor experience is a major friction right now, but the ecosystem has enough inertia to not only get over it, but fix it.
Full story
Until the Ethereum ETFs were approved, the ETH price faced a lot of criticism for being slow.
We have no intention of jumping on that bandwagon.
But we tried to understand why ETH has had such a slow start to this bull run, compared to other projects…
This is where we ended up:
All crypto projects succeed based on their appeal to investors, users and developers.
Over the past two years, ETH has undergone some massive upgrades, but with them have come growing pains that have eroded the “three pillars of attraction.”
Investors
A lot of transaction activity has moved to the 10+ major Ethereum layer 2 chains (think: apps on the iPhone, where Ethereum is the iPhone, and these layer 2 chains are the apps).
This is something good! It means that the Ethereum ecosystem can handle many more users without becoming slow and expensive.
The problem is that most of these L2s are quietly competing to grow the largest user base among them, and each of them has their own tokens.
This makes the decision-making process more difficult for investors…
(“Do I invest in Polygon? Optimism? Arbitrum? Which will be most valued in the coming years? Which will die?”)
And with that, investing in top competing projects like Bitcoin and Solana becomes the easier option from a decision-making perspective.
Users
These L2s make things faster and cheaper, but they also shatter compatibility. Back when everything was built on Ethereum layer 1 – if you owned ETH, you could explore any ETH-based application or platform.
But now this compatibility is limited to the L2 it is built on. If you have your ETH on the Base L2 and want to explore an Arbitrum app/platform, you’ll need to bridge your tokens (which isn’t necessarily quick or easy to do).
Crypto die-hards will overcome this friction, but it prompts the crypto-curious to label ETH as “too hard to use.”
Developers
Developers want to build a coding language they know (or can learn quickly), to a chain full of passionate users, with extensive tooling and resources.
At this point, the dominant, easy-to-build, user-chosen L2 has yet to be crowned.
So the decision about where developers should invest their time, money, blood, sweat, and tears comes (again) with a little extra friction and splintering focus.
Here’s the good news:
Ethereum has enough inertia to roll through these growing pains and make “account abstraction” a thing.
Account abstraction means users can explore all apps/platforms across the entire Ethereum Layer 1/2 ecosystem without even knowing they’re moving between chains (it all happens quickly and cheaply in the background).
We can’t wait!
