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Ethereum, the second largest crypto in the world by market capitalization, is at the crossroads. Once celebrated for its visionary approach, an implacable concentration of long -term research and bleeding innovation, Ethereum faces competitive pressures and internal misfortunes.

With the domination of bitcoin of more than 60% and the price of the ETH almost 70% reduction on its top of all time three years ago, the Ethereum ship seems to have failed. Fortunately, his fervent community gathers to put the course.

In his article, Strategic pivot of EthereumDavid Hoffman de Bankless explores the pivot challenges of layer 1 and offers an overview of the transformation of the “Gargantuan d’Ethereum”.

How Ethereum has deviated

Ethereum’s decentralized structure combines a multitude of voices and incentives, making consensus a complex task. It was slow to react to the evolution of market dynamics and the emergency has developed within the community to adapt. However, selecting problems and coordination solutions is a long task.

Hoffman spoke with the researchers of the Ethereum Foundation, Ansgar Dietrichs and Dankrad Feist, to describe several basic problems with which the agitated blockchain is confronted, including the underinvestment in layer 1. The story of the Ethereum ladder has been dominated for a long time by layer 2. But the plethora of competing rollers that develop interoperability that even gives Eth Maxis to the strongest a feeling of vertigo.

Dietrichs and Feist argue that Ethereum should return its objective on a scale and improve the base layer and as a result of a product approach that prioritizes user experience and adapts more quickly to a rapid industry filled with competitive threats.

The emptiness of Ethereum leadership results in a lack of clear direction and responsibility for the faux pas of the mother chain, and a “culture of ivory tower” leads to island research practices which suffocate open collaboration and lead to operational ineffectiveness.

All of these challenges made Ethereum courses turn. As Cryptoslate recently reported it, its domination of the market has flowed at a lower over five years, falling below 8%, because alternative blockchains attract users with lower costs and faster transactions. Even if the solutions of Layer-2 improve the efficiency, they also distance the activity of the Neatnet, reducing the income of the network and threatening the competitive point of Ethereum.

Strategic realignment – where Ethereum goes from here

Despite the less than favorable panorama, Hoffman and his without bank guests remain optimistic about the future of Ethereum, presenting a series of strategic pivots to revitalize the network.

A major initiative is the aggressive scaling of layer 1, with plans to increase the ten -capped gas limits over the next two years. Short -term upgrades target an increase of 36 million to 100 million gases by the end of 2024, while the next Glamsterdam Hard Fork aims to grow 300 million.

The integration of ZK (ZKVMS) systems could possibly increase the capacity of layer 1 by 100 times without compromising decentralization, transforming long -term research ambitions into short -term engineering objectives.

In addition to these technical upgrades, the ETH community goes from a protocol first to a state of mind focused on the product, emphasizing the user experience and the support of developers. Leadership and coordination also receive renewed attention, the Ethereum Foundation appointing new co-executive directors, Tomasz Stańczak and Hsiao-Wei Wang, to provide stronger direction and internal cohesion.

Ethereum also strives to standardize interoperability and encourage deeper integration between layer 1 and layer 2 solutions, positioning itself as a service provider for L2S. Recognizing the need for greater emergency, the network also adopts shorter roadmap cycles.

The upgrading of Pectra and beyond

The next Pectra upgrade, scheduled for May 7, is a focal point for these changes. Pectra promises to improve the characteristics of the portfolio, facilitate transaction costs and improve overall scalability, rekindle activity on the chain and restore confidence in the ecosystem. Industry leaders believe that these improvements could be a catalyst for renewed growth, which could bring Ethereum back to the $ 3,000 mark.

Other upgrades, such as Peerdas and Fusaka, are planned to extend data availability and reduce transaction costs in L2. However, as Cryptoslate reported, Ethereum’s ability to support a flourishing L2 ecosystem depends on continuous technical progress.

Hoffman underlines that the renewed direction of the Ethereum Foundation is only part of the equation. The wider ETH community must also adapt, update its messages and align its vision on the evolutionary strategy of the platform.

As he says:

“Ethereum is a large tent that contains space for many different voices.”

The upcoming challenge is to exploit this diversity and direct the ship to a more scalable, friendly and competitive future – or stay lost at sea, wading among the waves.

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