Ethereum's growth narrative is shifting from "scaling" to the spillover and integration of the "application layer." Its development has moved from the infrastructure phase into a period of application explosion and ecosystem reshaping, with a trillion-dollar "second curve" now taking form.

Switching Growth Engines: As Layer-2 (L2) scaling solutions mature, Ethereum has largely addressed its performance issues. However, it now faces competition from public chains like Solana and the entry of traditional finance (TradFi) giants. The new growth is coming from outside Web3, particularly from the Real World Asset (RWA) tokenization wave and the AI industry's need for a trusted settlement layer.

A Multi-Pronged New Roadmap:

* zkVM (Zero-Knowledge Virtual Machine) is pushing the mainnet to upgrade into a "computational settlement layer," using zero-knowledge proofs to enhance throughput and security.

The Ethereum Foundation has formed an AI team, "*dAI**," to proactively build a decentralized AI ecosystem, advancing new standards like ERC-8004 and x402, positioning Ethereum as the trust and settlement layer for decentralized AI.

* Privacy and Compliance solutions are being layered on, catering to institutional and individual user needs, including compliant privacy tech on L2/L3 and account abstraction.

The Impact of the Second Curve: If this transition succeeds, Ethereum will evolve from a Web3 application platform into a global computational and financial infrastructure—a "Global Value Settlement Layer." This will attract high-value deployments, push L2 ecosystems to evolve into collaborative networks, and support nascent ecosystems like institutional RWA and AI model markets.

---

On September 3rd, Etherealize, which describes itself as an "institutional-grade product, BD, and marketing arm for the Ethereum ecosystem," disclosed a $40 million funding round. Beyond the lead investors Electric Capital and Paradigm, it was particularly notable for the direct participation of Ethereum co-founder Vitalik Buterin and the Ethereum Foundation.

To some extent, this investment symbolizes the Ethereum community's firm support for a more professionalized, institutional development path. It also sends a clear signal: Ethereum's growth logic is shifting from "scaling" to the spillover and integration of the "application layer."

Looking back, from the DeFi summer of 2020-2021, to subsequent CeDeFi experiments, and now the accelerated integration with TradFi—Ethereum's method of innovating within traditional finance has constantly been adapting to survive.

Ethereum's development is moving from its "infrastructure phase" into a period of "application explosion and ecosystem reshaping." A trillion-dollar "second curve" is taking shape.

01. After Scaling: A New Growth Engine is Switching Gears

It's well known that Ethereum's primary focus has long been "Scaling."

With the maturation of L2 Rollup solutions like Arbitrum and Optimism in recent years, and the gradual implementation of foundational protocols like Danksharding and EIP-4844, Ethereum's basic computational capacity and throughput have significantly improved. The L2 ecosystem, in particular, has built a solid "execution layer" foundation.

It's fair to say that after years of exploration, Ethereum has largely solved the problem of being "usable." But the harder task is answering the next question: Who will use it, and how?

After all, the challenges facing Ethereum have never been more severe:

* On one hand, high-performance public chains like Solana and Sui are encroaching on the on-chain market with their "faster, cheaper" positioning.

* On the other hand, traditional Web2 giants like Visa, Stripe, PayPal, Robinhood, and even Fidelity are launching their own blockchains or integrating decentralized clearing/settlement systems to solidify their Crypto/TradFi strategies.

Over the past five years, at the application layer, Ethereum has undoubtedly been a hotbed of innovation—arguably the best "composable on-chain financial lab." It has supported the entire Web3 experimental wave, from DeFi and NFTs to DAOs, GameFi, and SocialFi.

However, the innovation in this phase primarily served Web3 native users and was essentially confined to a "self-circulation of on-chain capital." In other words, capital flowed on-chain, and protocols were stacked on-chain, but real-world assets, institutions, and users largely remained on the sidelines.

Web3 was logically self-consistent but struggled to connect with the needs of the real financial world. In this competitive landscape, Ethereum's "technical lead" is no longer a sufficient moat. To continue growing, it must answer a more profound question: How can it break through Web3's own boundaries to become the true underlying settlement layer for global assets?

The new growth is coming from outside Web3—simultaneously propelled by AI's computational demands and traditional finance's settlement needs into a new cycle:

The most typical example is the *RWA (Real World Asset) tokenization wave**. Traditional financial institutions like banks, brokerages, and fund companies are actively exploring moving assets such as bonds, stocks, and fund shares onto the blockchain for on-chain clearing and real-time settlement.

Concurrently, as AI model and data monopolies intensify, the *AI industry craves a neutral, trusted settlement layer** to address core pain points: model and data provenance, decentralized computation verification, and resistance to centralized risks. In short, AI needs a globally verifiable computation layer to price trust, and blockchain is naturally suited for this AI requirement.

Of course, to bear the weight of TradFi and AI demands, Ethereum must upgrade comprehensively in performance, privacy, and modularity.

02. The New Roadmap: Parallel Progress on zkVM, AI, and Privacy

In response to these new demands, key strategies are already being advanced within the Ethereum community and the Ethereum Foundation. Below are the currently public and widely discussed strategic directions.

First is zkVM (Zero-Knowledge Virtual Machine). This isn't merely a technical extension of L2 scaling; it's a transformative reshaping of the Ethereum mainnet's function. For instance, the Ethereum Foundation is currently advancing a mainnet-level zkVM architecture. This would replace the re-execution of transactions with zero-knowledge proof (ZKP) verification, drastically increasing throughput and security.

The core logic of zkVM lies in changing the trust model. Traditional Ethereum relies on all nodes re-executing transactions to reach consensus. The key advantage of zkVM is that it enables validating nodes to skip re-executing all transactions, needing only to verify the ZK proof, significantly reducing synchronization and execution costs.

Under this new architecture, the Ethereum mainnet is poised to become a pure "computational settlement layer," focused on verifying ZK proofs and anchoring the final state, while L2s become highly efficient "execution layers." This would evolve Ethereum from a blockchain into a global verifiable computation layer.

Last month, Vitalik Buterin retweeted and praised a minimal zkVM proposal from Ethereum developers: optimized for XMSS aggregation and recursion, leanVM minimizes commitment costs compared to Cairo via a four-instruction ISA, multilinear STARKs, and logup lookups.

Another clear signal was the Ethereum Foundation's establishment of the artificial intelligence team "**dAI**" on September 15th, dedicated to building a decentralized AI ecosystem. This marks Ethereum's shift from passively "being used by AI" to actively "integrating with AI."

The dAI team's core mission is to dedicate resources to defining the standards, incentives, and governance structures for AI models on the blockchain. This includes:

* Model Trustworthiness: How to ensure transparency in AI model training data and how to use ZK technology to prove the integrity of model inferences.

* New Standards: To better serve the AI ecosystem, the community is advancing new standards like ERC-8004 and x402:

* ERC-8004: Aims to establish a "composable, accessible" decentralized AI infrastructure layer, allowing developers to easily build and integrate AI model services.

* x402: Aims to define a unified standard for on-chain payments and settlement, ensuring efficient, atomic micro-payments when users access AI models, store data, or use decentralized computation services on-chain.

Through these efforts, Ethereum is attempting to define the underlying protocol and settlement mechanism for decentralized AI, positioning itself as the "value clearing and trust layer for decentralized AI."

Furthermore, to welcome TradFi's trillions of dollars in assets, Ethereum must resolve the paradox of privacy and compliance. Its privacy roadmap has begun to stratify to meet the needs of different groups:

* Institutional Privacy & Compliance (Core TradFi Demand): Focuses on exploring compliant privacy solutions on L2/L3. This means institutions can conduct encrypted transactions and settlements on-chain while providing auditable, verifiable transaction records to specific regulators (like auditors, oversight bodies) via ZKPs or permissioned control mechanisms, meeting regulatory requirements while protecting business secrets.

* Individual Privacy (Web3 User Protection): Leverages technologies like Account Abstraction (AA) and privacy-enhancing tech on L2 (e.g., private transactions) to address issues like MEV (Maximal Extractable Value) attacks and the leakage of personal transaction data at the protocol level, ensuring user on-chain activities are protected.

These three paths—Generality (zkVM), Application Boundaries (dAI/New Standards), and Compliance (Privacy)—collectively form the core strategy of Ethereum's "second curve" aimed at meeting AI and TradFi demands.

03. What If the "Second Curve" Leap Succeeds?

As seen from the 2020-2021 DeFi boom, subsequent CeDeFi practices, and the latest strides in actively integrating with TradFi, Ethereum's approach to innovating global finance has consistently followed the principle of "adapt or perish."

Therefore, the current "hyper-evolution" of Ethereum is no easy task. But if this leap is successful, its ecosystem and status will be thoroughly reshaped.

First, Ethereum will transition from an "application platform" for Web3 native users to a "computation & financial infrastructure platform" for the global mainstream economy. Its position within the global financial system will become more entrenched, becoming the de facto *"Global Value Settlement Layer."**

* Consequently, more high-value businesses (like institutional RWA, AI model verification, decentralized data markets) will choose to deploy directly on Ethereum or its zk-native structures, forming massive liquidity pools and trust anchors.

Then, the L2 / Rollups ecosystem will evolve into a *"collaborative network."** They will no longer be siloed "independent chains" but will be more deeply connected to the mainnet's zk-layer, specializing in providing different execution environments (EVM, ZKVM, customized privacy, etc.). Ultimately, sub-ecosystems for stablecoins, privacy protocols, data oracles, and AI model markets are expected to rise, providing the necessary "middleware" for institutions and AI.

In summary, the emerging "second curve" for Ethereum marks its leap from a "cryptocurrency computation layer" to a "global trust and settlement layer"—no longer just a speculator's playground, but rapidly transforming into an indispensable financial primitive within global economic infrastructure.

After all, the AI industry needs its credible neutrality, and traditional finance needs its efficiency and compliance. zkVM, the AI team, and the privacy roadmap are the combination punch Ethereum is throwing to meet these two trillion-dollar demands.

Believe it, the best is yet to come.

Ethereum's growth narrative is shifting from "scaling" to the spillover and integration of the "application layer." Its development has moved from the infrastructure phase into a period of application explosion and ecosystem reshaping, with a trillion-dollar "second curve" now taking form.

Switching Growth Engines: As Layer-2 (L2) scaling solutions mature, Ethereum has largely addressed its performance issues. However, it now faces competition from public chains like Solana and the entry of traditional finance (TradFi) giants. The new growth is coming from outside Web3, particularly from the Real World Asset (RWA) tokenization wave and the AI industry's need for a trusted settlement layer.

A Multi-Pronged New Roadmap:

* zkVM (Zero-Knowledge Virtual Machine) is pushing the mainnet to upgrade into a "computational settlement layer," using zero-knowledge proofs to enhance throughput and security.

The Ethereum Foundation has formed an AI team, "*dAI**," to proactively build a decentralized AI ecosystem, advancing new standards like ERC-8004 and x402, positioning Ethereum as the trust and settlement layer for decentralized AI.

* Privacy and Compliance solutions are being layered on, catering to institutional and individual user needs, including compliant privacy tech on L2/L3 and account abstraction.

The Impact of the Second Curve: If this transition succeeds, Ethereum will evolve from a Web3 application platform into a global computational and financial infrastructure—a "Global Value Settlement Layer." This will attract high-value deployments, push L2 ecosystems to evolve into collaborative networks, and support nascent ecosystems like institutional RWA and AI model markets.

---

On September 3rd, Etherealize, which describes itself as an "institutional-grade product, BD, and marketing arm for the Ethereum ecosystem," disclosed a $40 million funding round. Beyond the lead investors Electric Capital and Paradigm, it was particularly notable for the direct participation of Ethereum co-founder Vitalik Buterin and the Ethereum Foundation.

To some extent, this investment symbolizes the Ethereum community's firm support for a more professionalized, institutional development path. It also sends a clear signal: Ethereum's growth logic is shifting from "scaling" to the spillover and integration of the "application layer."

Looking back, from the DeFi summer of 2020-2021, to subsequent CeDeFi experiments, and now the accelerated integration with TradFi—Ethereum's method of innovating within traditional finance has constantly been adapting to survive.

Ethereum's development is moving from its "infrastructure phase" into a period of "application explosion and ecosystem reshaping." A trillion-dollar "second curve" is taking shape.

01. After Scaling: A New Growth Engine is Switching Gears

It's well known that Ethereum's primary focus has long been "Scaling."

With the maturation of L2 Rollup solutions like Arbitrum and Optimism in recent years, and the gradual implementation of foundational protocols like Danksharding and EIP-4844, Ethereum's basic computational capacity and throughput have significantly improved. The L2 ecosystem, in particular, has built a solid "execution layer" foundation.

It's fair to say that after years of exploration, Ethereum has largely solved the problem of being "usable." But the harder task is answering the next question: Who will use it, and how?

After all, the challenges facing Ethereum have never been more severe:

* On one hand, high-performance public chains like Solana and Sui are encroaching on the on-chain market with their "faster, cheaper" positioning.

* On the other hand, traditional Web2 giants like Visa, Stripe, PayPal, Robinhood, and even Fidelity are launching their own blockchains or integrating decentralized clearing/settlement systems to solidify their Crypto/TradFi strategies.

Over the past five years, at the application layer, Ethereum has undoubtedly been a hotbed of innovation—arguably the best "composable on-chain financial lab." It has supported the entire Web3 experimental wave, from DeFi and NFTs to DAOs, GameFi, and SocialFi.

However, the innovation in this phase primarily served Web3 native users and was essentially confined to a "self-circulation of on-chain capital." In other words, capital flowed on-chain, and protocols were stacked on-chain, but real-world assets, institutions, and users largely remained on the sidelines.

Web3 was logically self-consistent but struggled to connect with the needs of the real financial world. In this competitive landscape, Ethereum's "technical lead" is no longer a sufficient moat. To continue growing, it must answer a more profound question: How can it break through Web3's own boundaries to become the true underlying settlement layer for global assets?

The new growth is coming from outside Web3—simultaneously propelled by AI's computational demands and traditional finance's settlement needs into a new cycle:

The most typical example is the *RWA (Real World Asset) tokenization wave**. Traditional financial institutions like banks, brokerages, and fund companies are actively exploring moving assets such as bonds, stocks, and fund shares onto the blockchain for on-chain clearing and real-time settlement.

Concurrently, as AI model and data monopolies intensify, the *AI industry craves a neutral, trusted settlement layer** to address core pain points: model and data provenance, decentralized computation verification, and resistance to centralized risks. In short, AI needs a globally verifiable computation layer to price trust, and blockchain is naturally suited for this AI requirement.

Of course, to bear the weight of TradFi and AI demands, Ethereum must upgrade comprehensively in performance, privacy, and modularity.

02. The New Roadmap: Parallel Progress on zkVM, AI, and Privacy

In response to these new demands, key strategies are already being advanced within the Ethereum community and the Ethereum Foundation. Below are the currently public and widely discussed strategic directions.

First is zkVM (Zero-Knowledge Virtual Machine). This isn't merely a technical extension of L2 scaling; it's a transformative reshaping of the Ethereum mainnet's function. For instance, the Ethereum Foundation is currently advancing a mainnet-level zkVM architecture. This would replace the re-execution of transactions with zero-knowledge proof (ZKP) verification, drastically increasing throughput and security.

The core logic of zkVM lies in changing the trust model. Traditional Ethereum relies on all nodes re-executing transactions to reach consensus. The key advantage of zkVM is that it enables validating nodes to skip re-executing all transactions, needing only to verify the ZK proof, significantly reducing synchronization and execution costs.

Under this new architecture, the Ethereum mainnet is poised to become a pure "computational settlement layer," focused on verifying ZK proofs and anchoring the final state, while L2s become highly efficient "execution layers." This would evolve Ethereum from a blockchain into a global verifiable computation layer.

Last month, Vitalik Buterin retweeted and praised a minimal zkVM proposal from Ethereum developers: optimized for XMSS aggregation and recursion, leanVM minimizes commitment costs compared to Cairo via a four-instruction ISA, multilinear STARKs, and logup lookups.

Another clear signal was the Ethereum Foundation's establishment of the artificial intelligence team "**dAI**" on September 15th, dedicated to building a decentralized AI ecosystem. This marks Ethereum's shift from passively "being used by AI" to actively "integrating with AI."

The dAI team's core mission is to dedicate resources to defining the standards, incentives, and governance structures for AI models on the blockchain. This includes:

* Model Trustworthiness: How to ensure transparency in AI model training data and how to use ZK technology to prove the integrity of model inferences.

* New Standards: To better serve the AI ecosystem, the community is advancing new standards like ERC-8004 and x402:

* ERC-8004: Aims to establish a "composable, accessible" decentralized AI infrastructure layer, allowing developers to easily build and integrate AI model services.

* x402: Aims to define a unified standard for on-chain payments and settlement, ensuring efficient, atomic micro-payments when users access AI models, store data, or use decentralized computation services on-chain.

Through these efforts, Ethereum is attempting to define the underlying protocol and settlement mechanism for decentralized AI, positioning itself as the "value clearing and trust layer for decentralized AI."

Furthermore, to welcome TradFi's trillions of dollars in assets, Ethereum must resolve the paradox of privacy and compliance. Its privacy roadmap has begun to stratify to meet the needs of different groups:

* Institutional Privacy & Compliance (Core TradFi Demand): Focuses on exploring compliant privacy solutions on L2/L3. This means institutions can conduct encrypted transactions and settlements on-chain while providing auditable, verifiable transaction records to specific regulators (like auditors, oversight bodies) via ZKPs or permissioned control mechanisms, meeting regulatory requirements while protecting business secrets.

* Individual Privacy (Web3 User Protection): Leverages technologies like Account Abstraction (AA) and privacy-enhancing tech on L2 (e.g., private transactions) to address issues like MEV (Maximal Extractable Value) attacks and the leakage of personal transaction data at the protocol level, ensuring user on-chain activities are protected.

These three paths—Generality (zkVM), Application Boundaries (dAI/New Standards), and Compliance (Privacy)—collectively form the core strategy of Ethereum's "second curve" aimed at meeting AI and TradFi demands.

03. What If the "Second Curve" Leap Succeeds?

As seen from the 2020-2021 DeFi boom, subsequent CeDeFi practices, and the latest strides in actively integrating with TradFi, Ethereum's approach to innovating global finance has consistently followed the principle of "adapt or perish."

Therefore, the current "hyper-evolution" of Ethereum is no easy task. But if this leap is successful, its ecosystem and status will be thoroughly reshaped.

First, Ethereum will transition from an "application platform" for Web3 native users to a "computation & financial infrastructure platform" for the global mainstream economy. Its position within the global financial system will become more entrenched, becoming the de facto *"Global Value Settlement Layer."**

* Consequently, more high-value businesses (like institutional RWA, AI model verification, decentralized data markets) will choose to deploy directly on Ethereum or its zk-native structures, forming massive liquidity pools and trust anchors.

Then, the L2 / Rollups ecosystem will evolve into a *"collaborative network."** They will no longer be siloed "independent chains" but will be more deeply connected to the mainnet's zk-layer, specializing in providing different execution environments (EVM, ZKVM, customized privacy, etc.). Ultimately, sub-ecosystems for stablecoins, privacy protocols, data oracles, and AI model markets are expected to rise, providing the necessary "middleware" for institutions and AI.

In summary, the emerging "second curve" for Ethereum marks its leap from a "cryptocurrency computation layer" to a "global trust and settlement layer"—no longer just a speculator's playground, but rapidly transforming into an indispensable financial primitive within global economic infrastructure.

After all, the AI industry needs its credible neutrality, and traditional finance needs its efficiency and compliance. zkVM, the AI team, and the privacy roadmap are the combination punch Ethereum is throwing to meet these two trillion-dollar demands.

Believe it, the best is yet to come.