Arweave TX
0x7830...d123
Following last Wednesday’s Pectra upgrade, ETH recorded its strongest weekly performance since 2021.
"One of Bitcoin’s most brilliant traits is how elegantly simple its protocol is designed," remarked Vitalik Buterin, founder of the second-largest cryptocurrency Ethereum, speaking about its top rival.
The timing of his statement coincides with Ethereum’s ongoing identity crisis.
A week ago, Buterin penned this line in his blog post Simplifying the L1. Three days later, Ethereum developers deployed the network’s most complex upgrade to date.
On one hand, ETH surged post-Pectra, marking its best performance since 2021. On the other, its co-founder seeks to rebuild the network with a simpler architecture.
Is this the dawn of Ethereum’s revival—or yet another false hope for a network that has stagnated for years while competitors hit new highs?
This article explores Ethereum’s ongoing changes, their significance, and whether these developments can finally lift ETH out of its prolonged slump.
The success of Ethereum’s resurgence hinges largely on its latest upgrade.
On May 7, 2024, the Pectra upgrade—the most extensive code overhaul since The Merge (September 2022)—went live. It introduced smarter wallets, more efficient validators, and lower Layer 2 (L2) fees.
The upgrade, delayed by over a month, fundamentally reshapes Ethereum’s operations. Its centerpiece, Ethereum Improvement Proposal (EIP)-7702, endows regular wallets with smart contract capabilities.
This seemingly technical change dramatically improves user experience.
"Ethereum finally feels like a modern network," wrote anonymous Optimism contributor Binji on X, noting that Pectra reduces the clicks needed to "do what you want."
Key user benefits include:
Bundled transactions: Users can execute multiple actions without approving each step individually.
Gas-free UX: Stablecoins can now pay fees, eliminating the need for ETH in every transaction.
Freemium models: Dapps can sponsor gas, allowing users to interact without holding ETH.
For validators, EIP-7251 raises the staking cap from 32 ETH to 2,048 ETH, slashing operational costs—especially for institutional stakers.
L2s also benefit: EIP-7691 doubles blob space per block, helping keep fees low amid surging demand. Base Chain’s Jesse Pollak had warned L2 demand could grow 10x–20x by 2025.
But can technical improvements translate to market confidence?
Historically, Ethereum upgrades have been "buy the rumor, sell the news" events. After The Merge in 2022, ETH dropped over 30%. This time, however, the upgrade coincided with narrative and leadership shifts—and within 40 hours of Pectra’s launch, ETH rallied ~40%.
Three days before Pectra, Buterin published Simplifying the L1, arguably his most pivotal manifesto in years. His core message: Ethereum must become "nearly as simple as Bitcoin" within five years.
Over time, Ethereum’s complexity ballooned to address technical challenges. Now, its co-founder aims to strip this back to ensure long-term viability.
He noted that even "a high schooler can understand Bitcoin’s code," whereas Ethereum’s growing complexity limits its contributor pool.
His radical proposals include:
Replacing the Ethereum Virtual Machine (EVM) with RISC-V architecture for 100x performance gains.
Simplifying consensus via "3-Slot-Finality," ditching epochs and validator shuffling.
Standardizing protocols from data encoding to tree structures.
In February 2025, Executive Director Aya Miyaguchi transitioned to a newly created "Chair" role, quelling months of community discontent over the Foundation’s direction. Critics argued it prioritized ideological purity over competitiveness.
By April, a restructuring formalized the Foundation’s biggest governance shift ever, with new leadership prioritizing:
Scaling mainnet capacity
Improving L2 rollups
Enhancing UX
"We must accelerate the journey for developers and institutions building on Ethereum," wrote co-directors in a public statement.
The Foundation, once averse to marketing, now admits "clear messaging is part of marketing," marking a cultural U-turn.
Despite promising developments, Ethereum faces steep hurdles:
Price stagnation: ETH trades at ~$2,200, less than half its 2021 ATH ($4,878). Bitcoin and Solana have already surpassed their peaks.
Layer 2 paradox: Successful L2 scaling reduces mainnet fee revenue.
Staking inefficiencies: Pre-Pectra rules forced institutional stakers to run multiple nodes, cutting profits.
Technical debt: Complexity slows innovation and raises barriers to contribution.
Competition: Solana’s DEX volumes overtook Ethereum’s twice in 2025, while Bitcoin ETFs dominate institutional inflows.
March’s leadership crisis compounded these issues.
Ethereum’s current transformation isn’t just about upgrades—it’s a full-scale recalibration. The network now realizes technical excellence alone isn’t enough.
Timing is critical: These changes come after years of market share erosion. Pectra’s 40% bounce shows investor interest remains, but Ethereum faces rivals built for simplicity from day one.
The Foundation’s tech-expert leadership and embrace of marketing signal a cultural shift. While Pectra’s validator/L2 improvements offer short-term gains, long-term success hinges on Vitalik’s RISC-V vision.
The next upgrade, Fusaka, will test Ethereum’s commitment. If it prioritizes mainnet over L2 infrastructure, the strategic pivot is real.
The next 12 months will reveal whether this is a renaissance or belated adaptation. For investors, leadership execution and development momentum matter more than any single milestone.
If Ethereum balances core values with transformation, its "world ledger" vision could reposition ETH as a cornerstone asset of global finance—far beyond its current $2,200 price.
