The price may not be satisfactory, but Ethereum remains the leader in decentralization, permissionless access, and scalability.
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The price may not be satisfactory, but Ethereum remains the leader in decentralization, permissionless access, and scalability.
Wall Street doesn't care about decentralization, permissionless innovation, or scalability.
Navigating Web3 tides with focused insightsAuthor: Huang Shiliang
Since the major crash on August 5th, X has been flooded daily with negative news and FUD about ETH. The most common types include:
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Solana will surpass Ethereum.
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L2s diminish ETH's business value.
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Ethereum has stopped innovating.
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Wall Street only promotes BTC, not ETH.
In my view, none of these FUD points touch the core fundamentals of a blockchain. These criticisms miss the key issues, focusing instead on superficial aspects or baseless speculation.
I still believe Ethereum remains a very healthy blockchain; it's just that its price performance has lagged behind most investors' expectations.
When evaluating whether a blockchain is good, the most important criteria are the three fundamental promises of cryptocurrency and blockchain technology:
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Decentralization
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Permissionless
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Scalability
Currently, among all blockchains, only Ethereum fulfills all three of these criteria and has proven them in real-world production use.
We can assess a blockchain’s degree of decentralization from multiple angles.
First, consider whether any force could effectively shut down or destroy the network.
Bitcoin excels here—the enforcement agencies once abruptly shut down numerous mining pools and farms, yet Bitcoin continued operating without issue. Ethereum also went through similar shocks, but now it has transitioned from PoW to PoS.
It's hard to imagine any power capable of shutting down Ethereum today. That said, I think shutting down most blockchains would be difficult—that's simply part of blockchain's nature.
Second, we can evaluate whether the block-producing validator nodes are decentralized.
Ethereum’s PoS validators are often criticized for being too centralized, especially given Lido’s dominant share. However, even at its peak, Lido hasn’t exceeded 30%, which is algorithmically secure.
Mining or staking, as commercially driven activities, naturally tend toward centralization due to efficiency demands. In fact, Bitcoin’s current mining pool centralization far exceeds that of Ethereum—today, there are likely only four completely independent mining pools producing Bitcoin blocks.
Validator centralization is a challenge all chains face, but among leading blockchains, Ethereum handles it best.
Another aspect of decentralization is developer decentralization.
Blockchain node software developers hold immense power, as their code defines the network’s rules. If development becomes centralized and controlled by some hidden force, who might embed coin-stealing code directly into the software, the chain would be compromised.
Ethereum’s node software is split into execution and consensus layers—an extremely complex architecture. When the Beacon Chain first launched, I thought the system was so complicated that perhaps only a few teams on Earth could maintain and develop a full Ethereum node.
But now, given Ethereum’s enormous commercial value and the many businesses built atop it, multiple independent full node implementations have naturally emerged. There are now four mature implementations widely used, no longer relying solely on the core team backed by the Ethereum Foundation.
In terms of decentralization in full node development and maintenance, Ethereum is the most successful among all blockchains—even more so than Bitcoin.
I feel that many Ethereum users and investors fundamentally misunderstand its level of decentralization. On x.com, people frequently appeal to Vitalik like a deity, begging him to act or urging him not to sell his coins.
This behavior is entirely uncharacteristic of a truly decentralized community. A decentralized blockchain doesn’t need gods, nor should it allow them. Users praying to Vitalik should go trade stocks instead—stock markets are where you find centralized figures to pray to.
Maintaining permissionlessness remains the true challenge for blockchains and cryptocurrencies today.
Almost all crypto users register with exchanges and undergo KYC. Exchanges hold vast amounts of cryptocurrency and comply with regulations—especially U.S. regulations.
The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) maintains a list known as the "Specially Designated Nationals and Blocked Persons List (SDN List)," which includes individuals and entities suspected of illegal activities. This list contains certain cryptocurrency addresses and IP addresses.
Any entity or IP on this list becomes untouchable—other companies dare not provide services, including transaction inclusion.
After Binance accepted penalties, I believe every major institution in crypto—exchanges, mining pools, wallets, block explorers—will integrate this list. Individuals, addresses, or IPs on the list may find it increasingly difficult to use Bitcoin or Ethereum.
Reportedly, even real-name-verified mining pools for Bitcoin and Ethereum now comply with this list.
This poses the greatest threat to permissionlessness.
Take Tornado Cash, for example—blacklisted by exchanges. Any address that used Tornado Cash to mix funds may be denied service or have accounts frozen outright.
Yet, so far, Ethereum has maintained its permissionless nature. At least, Tornado Cash remains usable. It’s genuinely decentralized—despite being banned by a U.S. government agency, it still functions.
Still, this principle is under growing pressure.
Now, an increasing number of projects within the Ethereum ecosystem are beginning to censor users. Stablecoins like USDT and USDC, and even Dai after upgrading to USDS, now support blacklists. This is not a positive trend.
Overall, in horizontal comparison, Ethereum still performs relatively best in maintaining permissionlessness. Its economic ecosystem is the most vibrant—large-scale activity hides in plain sight. If you’re looking for weaknesses in permissionlessness, Ethereum is the hardest target.
In contrast, technically strong coins like Monero lack substantial economic ecosystems, so their permissionless utility is limited in practice.
Finally, scalability.
Thanks to Rollups, Ethereum has effectively solved its scalability issues.
Previously, Ethereum was truly congested, handling only around 15 transactions per second.
Now, counting transactions processed via Rollups, the entire Ethereum system likely exceeds 1,000 TPS (transactions per second). Arbitrum has already achieved sustained TPS over 100 in live operations.
Although critics argue that sharding at L1 is superior to the L1+L2 scaling approach, sharded chains like MultiversX haven’t been validated in real production environments. BCH developers claim they’ve solved scalability through the Adaptive Blocksize Limit Algorithm upgrade, but this hasn’t faced real-world stress testing either.
When it comes to proven scalability—being widely used, enduring prolonged periods of high and diverse transaction volumes that repeatedly push the network to its limits—only Ethereum meets this standard today.
Solana has faced such tests, but failed multiple times.
It’s just that the price performance has been poor.
Possibly, in this ETF-driven market environment, short-term price movements depend heavily on endorsement and adoption by Wall Street institutions. And these financial firms may simply not care about features like decentralization, permissionlessness, or scalability.
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