TL;DR

• The Ethereum user/developer/investor experience is high friction right now, but the ecosystem has enough inertia to not only get past it, but to fix it.

Full Story

Up until the Ethereum ETF’s were approved, the ETH price had been copping a lot of flack for being sluggish.

We’re not about to jump on that band wagon.

But we’ve been trying to make sense of why ETH has had such a slow start to this bull run, when compared to other projects…

Here’s where we ended up:

All crypto projects succeed based on their appeal to investors, users, and developers.

Over the past year or two ETH has seen some massive upgrades — but with that has come growing pains which have affected its ‘three pillars of appeal.’

Investors

A lot of transaction activity has moved over to the 10+ major Ethereum layer 2 chains (think: apps on the iPhone, where Ethereum is the iPhone, and these layer 2’s are the apps).

This is a good thing! It means the Ethereum ecosystem can handle way more users, without things getting slow and expensive.

The problem is, most of these L2’s are quietly fighting it out to grow the biggest user base among them, and each of them have their own tokens.

This makes the decision making process harder for investors…

(“Do I invest in Polygon? Optimism? Arbitrum? Which one will appreciate the most over the next few years? Which ones will die?”)

And with that, investing in competing top-tier projects like Bitcoin and Solana becomes the easier option from a decision making perspective.

Users

These L2’s are making things faster and cheaper — but they’re also splintering the compatibility. Back when everything was built on the Ethereum layer 1 — if you owned ETH, you could explore any ETH based application or platform.

But now, this compatibility is siloed to the L2 it’s built upon. If you have your ETH on the Base L2, and want to explore an Arbitrum app/platform — you need to bridge your tokens over (which is not necessarily quick or easy to do).

Crypto die hards will work through this friction, but it pushes the crypto curious to label ETH as ‘too hard to use.’

Developers

Devs want to build in a coding language they know (or can learn quickly), on a chain that is full of passionate users, with extensive tooling and resources.

Right now, the dominant, easy-to-build-on, user-chosen L2 is yet to be crowned.

So the decision on where devs should invest their time, money, blood, sweat, and tears comes (again) with a little extra friction, and splintering focus.

Here’s the good news:

Ethereum has enough inertia to roll right on through these growing pains, and onto making ‘account abstraction’ a thing.

Account abstraction will mean users can explore any apps/platforms across the entire Ethereum layer 1/2 ecosystem, without even knowing they’re moving between chains (it all just happens quick n’ cheap in the background).

We can’t wait!