Editor's Note: Recently, US-listed companies have begun to "re-evaluate" Ethereum. SharpLink Gaming plans to raise up to $1 billion through stock sales to purchase ETH as a strategic reserve; BTCS has also purchased 3,450 ETH for approximately $8.42 million. These moves may be sending a clear signal: ETH is transitioning from a "chain fuel" to a "corporate strategic asset."

From an experimental platform for the developer community to the infrastructure of DeFi and a long-term allocation in corporate finance, Ethereum's role is undergoing a profound transformation. In this wave of value re-evaluation, how should we understand the technical logic and economic model behind ETH?

Odaily Planet Daily has translated and condensed a deep article co-authored by early Ethereum investor and Lido co-founder Konstantin Lomashuk and Artem Kotelskiy, the research director of Cyber•Fund and a Princeton mathematics Ph.D., titled "The Ethereum Roadmap: Becoming the 'World Computer' Root Chain." This article systematically reviews Ethereum's development trajectory, protocol evolution, scaling paths, and its positioning in the Rollup era, attempting to answer a key question: Why is ETH worth "holding long-term"?

Note: Due to the length of the original text, the translator has made deletions and optimizations to improve readability without affecting the original meaning.

DeFi: Ethereum's First Product-Market Fit (PMF)

From its inception, Ethereum has been committed to building a globally shared, trustless computing platform. After a decade of development, it has evolved from an early technical experiment to the core foundation of decentralized finance (DeFi), the block space market, and the on-chain application ecosystem.

To understand how ETH has reached its current position, we must start with a key turning point—DeFi's product-market fit (PMF). This period coincided with the 2018–2020 bear market, during which the successive emergence of protocols such as ERC 20, Uniswap, DAI, Aave, and Compound gradually transformed Ethereum into the underlying layer of a self-custodial, composable, and permissionless financial system. The explosion of DeFi was a natural fit between technological innovation and market demand.

The "DeFi Summer" of 2020 marked the climax of this development, with a rapid increase in locked value and on-chain trading volumes surpassing centralized exchanges for the first time, beginning to reveal the network value of ETH. However, the exorbitant transaction fees that followed also exposed the scalability bottleneck of Ethereum and laid the groundwork for future technological shifts.

The Value Turning Point of ETH: From EIP-1559 to The Merge

If DeFi demonstrated the practical value of Ethereum, then the two upgrades of EIP-1559 and The Merge have provided the logic for ETH's long-term value.

In 2021, EIP-1559 was introduced, completely changing Ethereum's fee mechanism. The original "first-price auction" model was replaced by a base fee, which is burned rather than going to miners. This means that the more active the network, the more ETH is burned, reducing inflationary pressure and strengthening ETH's value support.

The indigo part shows that ETH began to achieve "value reversion" through a burn mechanism.

In September 2022, Ethereum completed a historic upgrade: the consensus mechanism shifted from proof of work (PoW) to proof of stake (PoS), marking the official implementation of The Merge. This highly technically challenging yet crucial transition reduced Ethereum's energy consumption by 8,000 times and lowered the annual issuance rate required for network security from 4% to less than 1%.

Subsequently, ETH's "net inflation rate" turned negative for a considerable period.

Rollup Era: Long-Term Faith in Collaboration and Symbiosis?

Scaling is Ethereum's core challenge. Faced with the trilemma of decentralization, security, and scalability, Ethereum ultimately chose the Rollup solution. Rollups execute transactions off-chain, only writing state changes and data to the main chain, ensuring the main chain's security while significantly increasing transaction throughput.

This also transformed Ethereum from a mere "execution platform" to a "security layer + data availability layer," forming a Rollup-centric scaling path.

However, Rollups are not just a technological change; they have also altered the logic of ETH's value flow. In the past, users paid fees directly to the main chain, but now most transactions are completed through Rollups, reducing the main chain's direct transaction demand. Rollups earn revenue by reselling block space, but after the Cancun upgrade, their direct fee expenditures to the main chain have been significantly reduced, sparking discussions of "parasitism." In reality, Rollups are more of an "business expansion" for Ethereum, relying on the main chain's security and data services to bring more users and transactions.

Although the main chain's transaction demand has decreased, the main chain's expansion and upgrades are still actively advancing, with the goal of increasing processing capabilities by a hundredfold or even a thousandfold in the coming years, providing stronger security and data support for Layer 2. Rollups and the main chain together form a complementary ecosystem, both dividing labor and collaborating, laying the foundation for Ethereum's sustainable future development.

Ethereum's Current Status Indicators: Crisis and Deep-Factor Analysis

Since the FTX collapse in 2022, the overall crypto industry has grown, but ETH has significantly lagged behind Bitcoin (BTC) and Solana (SOL). ETH's price is highly correlated with Ethereum network fees, and since 2022, fee growth has been weak, especially compared to the 2018–2022 cycle and Solana's performance in this cycle, with clear revenue pressure. The main reasons are threefold:

Factor A: Rollup "Parasitism"

Although Rollups profit from user fees, they currently do not回馈 sufficient value to the Ethereum mainnet.

From the data, this factor does exist but currently has a minimal impact on overall revenue. Rollups currently generate only a few million dollars in weekly revenue, with low fees partly because rollup sequencers can support gas limits far higher than the mainnet, so they do not need to charge users high fees like L1 networks.

More importantly, it is premature to question whether rollups are not反哺 the mainnet. In fact, the Ethereum community has "accidentally" adopted a strategy of providing data availability (DA) space to rollups for free to attract as many aggregation layers as possible, and this "concession" is a correct way to build the ecosystem in the early stage.

Factor B: L1 Strategic Focus Shifts to DA, Mainnet Development Marginalized

Since the launch of the Rollup route, Ethereum's strategic and user growth focus has almost entirely shifted to rollups, with the mainnet's expansion and maintenance relatively neglected.

This bias is somewhat true. When solving the problem of high mainnet fees, Ethereum chose to bet on Rollups, and this "all-in" strategy overlooked the potential of L1 itself. In retrospect, due to the fragmentation issues of Rollups gradually emerging and the fact that we have gradually found feasible L1 expansion paths (such as access lists, the development of zkEVM), it appears that the strategic under-allocation to L1 may have been excessive.

However, it must be acknowledged that this judgment is based on a hindsight perspective. The Rollup route was a pragmatic move in the face of mainnet congestion at the time, and zkEVM and other solutions were still far from realization. Therefore, it was difficult to reasonably allocate resources between L1 and DA at that time.

Moreover, even if we now have a clear path to increase the L1 gas limit by 100 times, to achieve performance above 10,000 TPS and support a comprehensive public chain computing platform, some form of horizontal sharding will still be inevitable. Against this backdrop, the choice of a Rollup-first strategy at that time was still a rational decision.

Factor C: Rollup's DA Demand Has Not Yet Broken Through Mainnet's DA Supply

This is the most critical and overlooked underlying issue: Rollup's demand for data availability space (DA) has not yet substantially exceeded Ethereum's supply.

Rollup sequencers are very efficient in packaging and uploading transactions to the mainnet, with a very high compression rate, resulting in their consumption of blob space being far less than the theoretical value. In addition, some user activities in this cycle (such as meme coin trading) have also been diverted by Tron and Solana.

Before the Pectra upgrade (May 7, 2025), with three blobs per block, Ethereum's DA supply was approximately 210 TPS. Until November 2024, this supply exceeded market demand. Even after the demand increased, the blob gas price showed that it did not rise significantly, indicating that demand had not yet surpassed supply. Recently, Pectra doubled the blob target to six per block, and DA supply increased again, far exceeding actual demand.

Therefore, Factor C is actually the fundamental variable affecting Factors A and B. Once Rollup's demand for blob space truly exceeds supply, blob fees will enter a market discovery phase, and the overall fee structure of the Ethereum network will undergo a qualitative change.

How to Evaluate ETH's Value? Ethereum's Business Logic

Is ETH a productive asset or a currency? We firmly believe that ETH should first and foremost be a productive asset, and only secondarily a currency.

The reason is that Ethereum's strongest moat comes from its technological advantages: a trust foundation and stability tested over the years, decentralization bringing neutrality and censorship resistance, a leading DeFi ecosystem, a high-quality R&D and developer community, and a robust network activity assurance mechanism. Ethereum is truly an unstoppable "global computer."

Secondly, as a productive asset dependent on technological adoption, ETH's monetary value can be solidified and strengthened. Although ETH as a currency can more easily跨越技术迭代周期，the safest path is to first build Ethereum into a technological platform, ensuring its economic model is sustainable, and then the monetary attribute will naturally emerge. Conversely, relying solely on "hype ETH as a currency" cannot establish a solid foundation.

In short, ETH's price consists of three parts: the discounted value of future fees, monetary premium (as a store of value, medium of exchange, and even unit of account), and speculative premium (including cultural and meme value). Although the latter two have a greater impact, the key to strengthening all three is to maximize the underlying network revenue, which is the foundation of ETH's value.

Ethereum's Long-Term Rollup Strategy: Why It's Correct? The Truth Behind the Solana Debate

The reason Ethereum firmly chose the "Rollup-centric" expansion path is very clear: it is the only architectural design that can balance security, scalability, and neutrality.

From a technological supply perspective, Ethereum is currently the safest and most decentralized smart contract platform. Through validating bridges and data availability layers (DA), Ethereum can "wholesale" the main chain's security to Rollups, helping them build their own chains without having to rebuild a trust system.

From a market demand perspective, users ultimately do not care which chain they are using—they only care about "which chain is the cheapest and safest to trade on." In the long run, the most rational choice is to be a Rollup, buying security, buying DA, buying consensus, and directly connecting to Ethereum. This will naturally lead to a market convergence phenomenon: Rollups will build their services around Ethereum's "neutral ledger" like businesses, rather than dispersing to other isolated chains.

Ethereum vs Solana

Based on 2024's fee revenue, some argue that Solana has begun to surpass Ethereum in the block space market. However, Solana's hardware-expansion-focused strategy carries higher risks, with the network periodically experiencing overload. If blockchain is to realize its full potential, that is, to massively migrate financial infrastructure to the chain, Solana will also eventually need to turn to sharding for expansion, while Ethereum has already taken a clear lead in terms of security, Rollup infrastructure, and ecosystem adoption.

More crucially, the majority of Solana's on-chain activities come from the Memecoin craze. Data shows that such trades once accounted for over 50% of its DEX trading volume. However, Memecoins are a short-term, zero-sum game phenomenon—once the hype dies down, its "high-income" myth will also be unsustainable.

ETH Value from Where? A Comprehensive Analysis from Asset Logic to Business Strategy

In contrast, Ethereum focuses on high-stickiness scenarios such as DeFi, which are not driven by speculative frenzy but by the migration of real financial activities to the chain.

The most significant and important difference: Solana's validator nodes are centralized, while Ethereum has the world's most diverse staker network. This decentralization itself is the strongest moat.

Problems with the Rollup Strategy

If the Rollup route is correct and Ethereum's long-term future is bright, why has ETH's price performance been poor?

Technically, the biggest flaw of Rollups is the lack of default interoperability, leading to state fragmentation, which severely affects the experience of users and developers.

Commercially, the key issue is that Ethereum has not yet clearly communicated its business strategy for Rollups:

• Short-term adoption strategy: How to drive rapid growth of Rollups?

• Long-term moat: Why won't Rollups switch to other data availability platforms?

Rollup Business Strategy: Expansion, Differentiation, and Moat Building

1. Ethereum Should Prioritize Expansion and Continuously Provide Abundant and Low-Cost Data Availability (DA)

Ethereum is in a highly competitive and rapidly changing technological network market, where the eventual winner will enjoy strong network effects. In this environment, the correct strategy is to offer a high-quality product and rapidly expand the user base at a very low or even almost free price, which is the growth path of most successful tech networks.

Therefore, Ethereum must keep data availability (DA) prices low to minimize the barrier to entry for Rollups. After the Cancun upgrade, Ethereum provided a capacity of three blobs, which exceeded demand in the short term and effectively suppressed prices. Although this strategy was not intentional, it has achieved good results.

1. Solving Rollup Interoperability and Enhancing User and Developer Experience

Interoperability is the biggest missing piece in the Rollup era for Ethereum. Fragmentation severely affects users and developers, and solving interoperability can unify the experience, close the gap with integrated chains, and is also key to building a liquidity moat.

The community is actively promoting solutions such as ERC-7683 for second-level medium-scale asset cross-chain swaps and 2-of-3 OP+ZK+TEE for hourly large-scale asset cross-chain bridges.

1. Differentiation Strategy and Moat Building

Ethereum needs to differentiate in DA services to attract marginal Rollup customers and build a moat to lock in ecosystem clients.

The key moat comes from three network effects: trust, liquidity, and composability. Currently, the demand for composability across Rollups is not clear, and the main value is concentrated in trust and liquidity, which will naturally expand from Ethereum L1 to the Rollup ecosystem after solving interoperability.

In terms of trust, Rollups enjoy the highest security through Ethereum DA, while independent chains have weaker security. The security of Rollups using Ethereum DA continues to strengthen, and the moat keeps consolidating.

In terms of liquidity, the institutional-level liquidity of Ethereum L1 is an important factor for Rollups. After Rollups connect to Ethereum DA, they can obtain the full-ecosystem institutional liquidity, greatly improving capital efficiency and forming a solid moat.

Therefore, the market will drive Rollups to use Ethereum DA to obtain the highest security and liquidity. Ethereum should strengthen these two advantages and attract institutional clients with its brand and trust.

The Path of Value Reversion: From "Maximizing Fees" to "Maximizing Value Carriage"

When Ethereum scales data availability (DA) to the million TPS level (e.g., through 2D PeerDAS solutions) and the Rollup ecosystem voluntarily and firmly binds to Ethereum DA, Ethereum will gain significant fee revenue.

At the main chain level, the widespread adoption of DeFi and enterprise applications will be the main drivers, while the popularity of Rollups will further amplify this effect. At the same time, Rollups will also pay for interoperability and settlement services, contributing additional revenue.

At the DA level, the key to a sustainable economy is to increase the minimum blob price. The specific approach is to monitor the overall revenue of Rollups and set a reasonable minimum price to ensure that Rollups pass a certain proportion of value to Ethereum.

For example, in the next few years, assuming Rollups dominate the CeDeFi payment market, processing about 10,000 TPS with annual revenue in the billions of dollars, and Ethereum DA supply exceeds 10,000 TPS. At this time, although blob transaction fees will not fully enter market price discovery, if the minimum fee is set to burn 0.3 cents per DA transaction, it could bring approximately $1 billion in annual income for ETH holders.

Further covering the high-frequency trading market, such as social, trading, and AI agent coordination, Rollups' TPS could reach the 30,000 level, generating DA fee revenue exceeding $10 billion, while transaction costs remain below one cent.

Such revenue is affected by ETH price and other factors, and the minimum price needs to be dynamically adjusted, likely decided by community consensus, similar to today's gas limit mechanism. Future research is also needed on the optimal pricing strategy for blobs, such as improving the correlation with Ethereum L1 fee markets. In addition, as Ethereum transitions to zkEVM or RISC-V, new technologies like SNARK infrastructure will help improve fee capture efficiency.

The key is that at this stage, it is not urgent to directly extract value from transactions but to maximize support and promotion of high-value activities in Ethereum blocks and blob space. This will not only generate and enhance network effects but also help Ethereum capture the expanding block space market and solidify its economic foundation. The path of value reversion is thus very clear.

Editor's Note: Recently, US-listed companies have begun to "re-evaluate" Ethereum. SharpLink Gaming plans to raise up to $1 billion through stock sales to purchase ETH as a strategic reserve; BTCS has also purchased 3,450 ETH for approximately $8.42 million. These moves may be sending a clear signal: ETH is transitioning from a "chain fuel" to a "corporate strategic asset."

From an experimental platform for the developer community to the infrastructure of DeFi and a long-term allocation in corporate finance, Ethereum's role is undergoing a profound transformation. In this wave of value re-evaluation, how should we understand the technical logic and economic model behind ETH?

Odaily Planet Daily has translated and condensed a deep article co-authored by early Ethereum investor and Lido co-founder Konstantin Lomashuk and Artem Kotelskiy, the research director of Cyber•Fund and a Princeton mathematics Ph.D., titled "The Ethereum Roadmap: Becoming the 'World Computer' Root Chain." This article systematically reviews Ethereum's development trajectory, protocol evolution, scaling paths, and its positioning in the Rollup era, attempting to answer a key question: Why is ETH worth "holding long-term"?

Note: Due to the length of the original text, the translator has made deletions and optimizations to improve readability without affecting the original meaning.

DeFi: Ethereum's First Product-Market Fit (PMF)

From its inception, Ethereum has been committed to building a globally shared, trustless computing platform. After a decade of development, it has evolved from an early technical experiment to the core foundation of decentralized finance (DeFi), the block space market, and the on-chain application ecosystem.

To understand how ETH has reached its current position, we must start with a key turning point—DeFi's product-market fit (PMF). This period coincided with the 2018–2020 bear market, during which the successive emergence of protocols such as ERC 20, Uniswap, DAI, Aave, and Compound gradually transformed Ethereum into the underlying layer of a self-custodial, composable, and permissionless financial system. The explosion of DeFi was a natural fit between technological innovation and market demand.

The "DeFi Summer" of 2020 marked the climax of this development, with a rapid increase in locked value and on-chain trading volumes surpassing centralized exchanges for the first time, beginning to reveal the network value of ETH. However, the exorbitant transaction fees that followed also exposed the scalability bottleneck of Ethereum and laid the groundwork for future technological shifts.

The Value Turning Point of ETH: From EIP-1559 to The Merge

If DeFi demonstrated the practical value of Ethereum, then the two upgrades of EIP-1559 and The Merge have provided the logic for ETH's long-term value.

In 2021, EIP-1559 was introduced, completely changing Ethereum's fee mechanism. The original "first-price auction" model was replaced by a base fee, which is burned rather than going to miners. This means that the more active the network, the more ETH is burned, reducing inflationary pressure and strengthening ETH's value support.

The indigo part shows that ETH began to achieve "value reversion" through a burn mechanism.

In September 2022, Ethereum completed a historic upgrade: the consensus mechanism shifted from proof of work (PoW) to proof of stake (PoS), marking the official implementation of The Merge. This highly technically challenging yet crucial transition reduced Ethereum's energy consumption by 8,000 times and lowered the annual issuance rate required for network security from 4% to less than 1%.

Subsequently, ETH's "net inflation rate" turned negative for a considerable period.

Rollup Era: Long-Term Faith in Collaboration and Symbiosis?

Scaling is Ethereum's core challenge. Faced with the trilemma of decentralization, security, and scalability, Ethereum ultimately chose the Rollup solution. Rollups execute transactions off-chain, only writing state changes and data to the main chain, ensuring the main chain's security while significantly increasing transaction throughput.

This also transformed Ethereum from a mere "execution platform" to a "security layer + data availability layer," forming a Rollup-centric scaling path.

However, Rollups are not just a technological change; they have also altered the logic of ETH's value flow. In the past, users paid fees directly to the main chain, but now most transactions are completed through Rollups, reducing the main chain's direct transaction demand. Rollups earn revenue by reselling block space, but after the Cancun upgrade, their direct fee expenditures to the main chain have been significantly reduced, sparking discussions of "parasitism." In reality, Rollups are more of an "business expansion" for Ethereum, relying on the main chain's security and data services to bring more users and transactions.

Although the main chain's transaction demand has decreased, the main chain's expansion and upgrades are still actively advancing, with the goal of increasing processing capabilities by a hundredfold or even a thousandfold in the coming years, providing stronger security and data support for Layer 2. Rollups and the main chain together form a complementary ecosystem, both dividing labor and collaborating, laying the foundation for Ethereum's sustainable future development.

Ethereum's Current Status Indicators: Crisis and Deep-Factor Analysis

Since the FTX collapse in 2022, the overall crypto industry has grown, but ETH has significantly lagged behind Bitcoin (BTC) and Solana (SOL). ETH's price is highly correlated with Ethereum network fees, and since 2022, fee growth has been weak, especially compared to the 2018–2022 cycle and Solana's performance in this cycle, with clear revenue pressure. The main reasons are threefold:

Factor A: Rollup "Parasitism"

Although Rollups profit from user fees, they currently do not回馈 sufficient value to the Ethereum mainnet.

From the data, this factor does exist but currently has a minimal impact on overall revenue. Rollups currently generate only a few million dollars in weekly revenue, with low fees partly because rollup sequencers can support gas limits far higher than the mainnet, so they do not need to charge users high fees like L1 networks.

More importantly, it is premature to question whether rollups are not反哺 the mainnet. In fact, the Ethereum community has "accidentally" adopted a strategy of providing data availability (DA) space to rollups for free to attract as many aggregation layers as possible, and this "concession" is a correct way to build the ecosystem in the early stage.

Factor B: L1 Strategic Focus Shifts to DA, Mainnet Development Marginalized

Since the launch of the Rollup route, Ethereum's strategic and user growth focus has almost entirely shifted to rollups, with the mainnet's expansion and maintenance relatively neglected.

This bias is somewhat true. When solving the problem of high mainnet fees, Ethereum chose to bet on Rollups, and this "all-in" strategy overlooked the potential of L1 itself. In retrospect, due to the fragmentation issues of Rollups gradually emerging and the fact that we have gradually found feasible L1 expansion paths (such as access lists, the development of zkEVM), it appears that the strategic under-allocation to L1 may have been excessive.

However, it must be acknowledged that this judgment is based on a hindsight perspective. The Rollup route was a pragmatic move in the face of mainnet congestion at the time, and zkEVM and other solutions were still far from realization. Therefore, it was difficult to reasonably allocate resources between L1 and DA at that time.

Moreover, even if we now have a clear path to increase the L1 gas limit by 100 times, to achieve performance above 10,000 TPS and support a comprehensive public chain computing platform, some form of horizontal sharding will still be inevitable. Against this backdrop, the choice of a Rollup-first strategy at that time was still a rational decision.

Factor C: Rollup's DA Demand Has Not Yet Broken Through Mainnet's DA Supply

This is the most critical and overlooked underlying issue: Rollup's demand for data availability space (DA) has not yet substantially exceeded Ethereum's supply.

Rollup sequencers are very efficient in packaging and uploading transactions to the mainnet, with a very high compression rate, resulting in their consumption of blob space being far less than the theoretical value. In addition, some user activities in this cycle (such as meme coin trading) have also been diverted by Tron and Solana.

Before the Pectra upgrade (May 7, 2025), with three blobs per block, Ethereum's DA supply was approximately 210 TPS. Until November 2024, this supply exceeded market demand. Even after the demand increased, the blob gas price showed that it did not rise significantly, indicating that demand had not yet surpassed supply. Recently, Pectra doubled the blob target to six per block, and DA supply increased again, far exceeding actual demand.

Therefore, Factor C is actually the fundamental variable affecting Factors A and B. Once Rollup's demand for blob space truly exceeds supply, blob fees will enter a market discovery phase, and the overall fee structure of the Ethereum network will undergo a qualitative change.

How to Evaluate ETH's Value? Ethereum's Business Logic

Is ETH a productive asset or a currency? We firmly believe that ETH should first and foremost be a productive asset, and only secondarily a currency.

The reason is that Ethereum's strongest moat comes from its technological advantages: a trust foundation and stability tested over the years, decentralization bringing neutrality and censorship resistance, a leading DeFi ecosystem, a high-quality R&D and developer community, and a robust network activity assurance mechanism. Ethereum is truly an unstoppable "global computer."

Secondly, as a productive asset dependent on technological adoption, ETH's monetary value can be solidified and strengthened. Although ETH as a currency can more easily跨越技术迭代周期，the safest path is to first build Ethereum into a technological platform, ensuring its economic model is sustainable, and then the monetary attribute will naturally emerge. Conversely, relying solely on "hype ETH as a currency" cannot establish a solid foundation.

In short, ETH's price consists of three parts: the discounted value of future fees, monetary premium (as a store of value, medium of exchange, and even unit of account), and speculative premium (including cultural and meme value). Although the latter two have a greater impact, the key to strengthening all three is to maximize the underlying network revenue, which is the foundation of ETH's value.

Ethereum's Long-Term Rollup Strategy: Why It's Correct? The Truth Behind the Solana Debate

The reason Ethereum firmly chose the "Rollup-centric" expansion path is very clear: it is the only architectural design that can balance security, scalability, and neutrality.

From a technological supply perspective, Ethereum is currently the safest and most decentralized smart contract platform. Through validating bridges and data availability layers (DA), Ethereum can "wholesale" the main chain's security to Rollups, helping them build their own chains without having to rebuild a trust system.

From a market demand perspective, users ultimately do not care which chain they are using—they only care about "which chain is the cheapest and safest to trade on." In the long run, the most rational choice is to be a Rollup, buying security, buying DA, buying consensus, and directly connecting to Ethereum. This will naturally lead to a market convergence phenomenon: Rollups will build their services around Ethereum's "neutral ledger" like businesses, rather than dispersing to other isolated chains.

Ethereum vs Solana

Based on 2024's fee revenue, some argue that Solana has begun to surpass Ethereum in the block space market. However, Solana's hardware-expansion-focused strategy carries higher risks, with the network periodically experiencing overload. If blockchain is to realize its full potential, that is, to massively migrate financial infrastructure to the chain, Solana will also eventually need to turn to sharding for expansion, while Ethereum has already taken a clear lead in terms of security, Rollup infrastructure, and ecosystem adoption.

More crucially, the majority of Solana's on-chain activities come from the Memecoin craze. Data shows that such trades once accounted for over 50% of its DEX trading volume. However, Memecoins are a short-term, zero-sum game phenomenon—once the hype dies down, its "high-income" myth will also be unsustainable.

ETH Value from Where? A Comprehensive Analysis from Asset Logic to Business Strategy

In contrast, Ethereum focuses on high-stickiness scenarios such as DeFi, which are not driven by speculative frenzy but by the migration of real financial activities to the chain.

The most significant and important difference: Solana's validator nodes are centralized, while Ethereum has the world's most diverse staker network. This decentralization itself is the strongest moat.

Problems with the Rollup Strategy

If the Rollup route is correct and Ethereum's long-term future is bright, why has ETH's price performance been poor?

Technically, the biggest flaw of Rollups is the lack of default interoperability, leading to state fragmentation, which severely affects the experience of users and developers.

Commercially, the key issue is that Ethereum has not yet clearly communicated its business strategy for Rollups:

• Short-term adoption strategy: How to drive rapid growth of Rollups?

• Long-term moat: Why won't Rollups switch to other data availability platforms?

Rollup Business Strategy: Expansion, Differentiation, and Moat Building

1. Ethereum Should Prioritize Expansion and Continuously Provide Abundant and Low-Cost Data Availability (DA)

Ethereum is in a highly competitive and rapidly changing technological network market, where the eventual winner will enjoy strong network effects. In this environment, the correct strategy is to offer a high-quality product and rapidly expand the user base at a very low or even almost free price, which is the growth path of most successful tech networks.

Therefore, Ethereum must keep data availability (DA) prices low to minimize the barrier to entry for Rollups. After the Cancun upgrade, Ethereum provided a capacity of three blobs, which exceeded demand in the short term and effectively suppressed prices. Although this strategy was not intentional, it has achieved good results.

1. Solving Rollup Interoperability and Enhancing User and Developer Experience

Interoperability is the biggest missing piece in the Rollup era for Ethereum. Fragmentation severely affects users and developers, and solving interoperability can unify the experience, close the gap with integrated chains, and is also key to building a liquidity moat.

The community is actively promoting solutions such as ERC-7683 for second-level medium-scale asset cross-chain swaps and 2-of-3 OP+ZK+TEE for hourly large-scale asset cross-chain bridges.

1. Differentiation Strategy and Moat Building

Ethereum needs to differentiate in DA services to attract marginal Rollup customers and build a moat to lock in ecosystem clients.

The key moat comes from three network effects: trust, liquidity, and composability. Currently, the demand for composability across Rollups is not clear, and the main value is concentrated in trust and liquidity, which will naturally expand from Ethereum L1 to the Rollup ecosystem after solving interoperability.

In terms of trust, Rollups enjoy the highest security through Ethereum DA, while independent chains have weaker security. The security of Rollups using Ethereum DA continues to strengthen, and the moat keeps consolidating.

In terms of liquidity, the institutional-level liquidity of Ethereum L1 is an important factor for Rollups. After Rollups connect to Ethereum DA, they can obtain the full-ecosystem institutional liquidity, greatly improving capital efficiency and forming a solid moat.

Therefore, the market will drive Rollups to use Ethereum DA to obtain the highest security and liquidity. Ethereum should strengthen these two advantages and attract institutional clients with its brand and trust.

The Path of Value Reversion: From "Maximizing Fees" to "Maximizing Value Carriage"

When Ethereum scales data availability (DA) to the million TPS level (e.g., through 2D PeerDAS solutions) and the Rollup ecosystem voluntarily and firmly binds to Ethereum DA, Ethereum will gain significant fee revenue.

At the main chain level, the widespread adoption of DeFi and enterprise applications will be the main drivers, while the popularity of Rollups will further amplify this effect. At the same time, Rollups will also pay for interoperability and settlement services, contributing additional revenue.

At the DA level, the key to a sustainable economy is to increase the minimum blob price. The specific approach is to monitor the overall revenue of Rollups and set a reasonable minimum price to ensure that Rollups pass a certain proportion of value to Ethereum.

For example, in the next few years, assuming Rollups dominate the CeDeFi payment market, processing about 10,000 TPS with annual revenue in the billions of dollars, and Ethereum DA supply exceeds 10,000 TPS. At this time, although blob transaction fees will not fully enter market price discovery, if the minimum fee is set to burn 0.3 cents per DA transaction, it could bring approximately $1 billion in annual income for ETH holders.

Further covering the high-frequency trading market, such as social, trading, and AI agent coordination, Rollups' TPS could reach the 30,000 level, generating DA fee revenue exceeding $10 billion, while transaction costs remain below one cent.

Such revenue is affected by ETH price and other factors, and the minimum price needs to be dynamically adjusted, likely decided by community consensus, similar to today's gas limit mechanism. Future research is also needed on the optimal pricing strategy for blobs, such as improving the correlation with Ethereum L1 fee markets. In addition, as Ethereum transitions to zkEVM or RISC-V, new technologies like SNARK infrastructure will help improve fee capture efficiency.

The key is that at this stage, it is not urgent to directly extract value from transactions but to maximize support and promotion of high-value activities in Ethereum blocks and blob space. This will not only generate and enhance network effects but also help Ethereum capture the expanding block space market and solidify its economic foundation. The path of value reversion is thus very clear.