The "Soul Battle" of Ethereum in "Ten Years"

After ten years of existence and establishing a dominant position in the market, Ethereum is facing a profound debate about its core identification.

The key to this "soul battle" is: should Ethereum's future become a high-performance execution layer that directly competes with emerging rivals, or should it consolidate its unique position as the world's most secure and decentralized settlement layer, serving its thriving Layer 2 ecosystem.

Layer 2 refers to off-chain networks, systems, or technologies built on top of the underlying blockchain (often referred to as Layer 1) with the purpose of expanding the underlying blockchain network. Relevant data shows that Layer 2 transactions account for 85%, but large amounts of funds still primarily remain on the Ethereum mainnet.

Faced with this contradiction, at the recent EthCC conference held in Cannes, several founders, CEOs, and key builders in the Ethereum ecosystem shared their views with the crypto industry media Cointelegraph, including Tomasz Stańczak, Co-Executive Director of the Ethereum Foundation (EF), Sandeep Nailwal, Co-Founder of Polygon, and Jerome de Tychey, President of Ethereum France.

Tomasz Stańczak stated that unifying the ecosystem, enhancing interoperability, and improving user experience have become the top priorities over the past 18 months; Polygon Labs CEO Marc Boiron warned that trying to compete with new-generation public chains like Solana in execution speed is "dangerous."

Fredrik Haga, co-founder of Dune Analytics, pointed out that since the introduction of Blobs in March 2024, the fees for Layer 2 settling to the mainnet have dropped to nearly zero, which is a technical breakthrough but an economic setback for Layer 1 validators.

Despite intense internal debates, market signals show strong confidence. The world's largest asset management company, BlackRock, is tokenizing assets on Ethereum, and over 90% of real-world asset (RWA) tokenization projects are choosing to build on Ethereum.

This indicates that the market may have already provided an answer with action for the "soul" of Ethereum: an irreplaceable global settlement layer.

The Cost of Scalability

Since 2015, the evolution of Ethereum has been filled with trade-offs.

From Proof of Work (PoW) to Proof of Stake (PoS) "The Merge", Ethereum has successfully achieved a transformation of its consensus algorithm, fundamentally changing the way the protocol operates.

However, with the surge in users and applications, the performance bottlenecks of its underlying chain have become increasingly prominent. To address this issue, the community has adopted a Layer 2-centered scaling roadmap, shifting transaction execution to independent second-layer networks.

This strategy optimizes scale, speed, and cost through cryptographic innovations such as zero-knowledge proofs (ZK-proofs). In particular, the "Blobs" feature introduced in the 2024 Dencun upgrade has caused Layer 2 transaction fees to plummet by 90%.

This technological victory, on the contrary, puts pressure on the incentive income of Layer 1 validators.

Data shows that although 85% of transactions currently occur on Layer 2, 85% of the capital remains on Layer 1.

The Balancing Act of the Foundation

In the face of the complex dynamics of the ecosystem, the Ethereum Foundation (EF) is trying to play the role of a balancer.

After the organizational restructuring in 2025, the new team led by Joint Executive Directors Tomasz Stańczak and Hsiao-Wei Wang is fully committed to advancing a unified ecological vision.

The Pectra upgrade launched in May this year is the latest embodiment of this effort.

The Pectra upgrade includes 11 Ethereum Improvement Proposals (EIPs) aimed at further enhancing scalability, user experience, and staking efficiency.

Stańczak stated that over the past 18 months, the foundation's top priorities have been to address issues of liquidity unification, interoperability, and improving user experience.

"The current focus is on interoperability, tools, and standards, making all the chains around Ethereum feel like a single ecosystem where users can naturally transfer assets between them."

Jerome de Tychey, president of Ethereum France, added that the future success of the protocol depends on finding a balance between prioritizing the development of Layer 1 mechanisms and maintaining a symbiotic relationship with Layer 2.

He believes that the community is simultaneously focusing on the sustainability of Layer 1 and the security and user experience of Layer 2, which is a positive signal indicating that Ethereum is becoming more user-friendly.

Competition or Focus?

The debate about the future of Ethereum ultimately boils down to a strategic choice: should it directly compete with high-performance public chains like Solana, SUI, and Aptos at the execution level, or focus on its core strengths?

Marc Boiron, the CEO of Polygon Labs, has issued a clear warning regarding this. He believes that if Ethereum overly invests in competition at the execution layer, it could very likely be "surpassed" by competitors who have focused on this from the very beginning.

He stated: "Trying to overcompete in execution is dangerous."

The views of Sandeep Nailwal, co-founder of Polygon, are more direct; he believes that the core value proposition of Ethereum has always been a "highly decentralized, sovereign censorship-resistant, permissionless settlement layer."

He concluded:

"Ethereum has been dragged into a race for execution, which is not its strong suit. If Ethereum can leverage its strengths and focus on becoming the best settlement layer, we already have enough network effects and momentum to build the entire Web3 world around it."

How to proceed in the next decade?

Despite the constant criticism over the past year, the discussions at the EthCC conference generally conveyed an optimistic sentiment about the future of Ethereum.

This optimism is not born from fanaticism, but is based on real utility and on-chain metrics.

The strongest evidence comes from institutional adoption—over 90% of real-world assets (RWA) tokenization is done on Ethereum.

Asset management giant BlackRock has tokenized its securities products on Ethereum, while Robinhood also announced during the conference the launch of its Ethereum-based Layer 2 network, targeting RWA and securities tokenization.

These actions clearly indicate that large traditional financial institutions value the security and decentralization of Ethereum as a settlement layer more than just the speed of transactions.

"DeFi (Decentralized Finance) will undoubtedly dominate the global market, and all of this will happen on Ethereum," asserted Stańczak from the Ethereum Foundation.

Jerome de Tychey expressed more sharply:

"Everything else is a ghost train heading in the wrong direction."

This seems to imply that, regardless of internal disputes, Ethereum's position as a trust anchor has reached a consensus in the market.