Author: Savannah Fortis, CoinTelegraph; Compiler: Deng Tong, Golden Finance
Nine years ago on July 30, the Ethereum network was launched, sparking a revolution in the field of decentralization.
In 2015, Vitalik Buterin and a group of visionary developers introduced the concept of smart contracts through Ethereum, which completely changed the blockchain landscape by allowing decentralized applications (dApps) to be built on its platform.
Unlike Bitcoin, which was primarily used as a digital currency before the advent of Bitcoin Ordinals, Ethereum was designed as a versatile, programmable blockchain. This enables developers to create and deploy a wide range of DApps that extend far beyond financial transactions.
Over the past nine years, Ethereum has grown from this ambitious project idea to the cornerstone of the crypto ecosystem, influencing countless innovations in finance, supply chain management, gaming, and more. It has fostered a vibrant community of developers, entrepreneurs, and enthusiasts who are constantly pushing the limits of blockchain technology.
To mark this milestone, we spoke to several key executives involved in the Ethereum ecosystem to share nine key insights into Ethereum’s past achievements, current challenges, and future potential.
1. Scalability Challenges in Emerging Markets
Ethereum, the largest blockchain with nearly $60 billion in Total Value Locked (TVL), is the ultimate example of the need for constant evolution in order to scale and carry its current volume of activity.
Despite the network’s multiple attempts to reduce fees over the years, Dominic Schwenter, COO of Layer 2 platform Lisk, highlighted that such fees are a pressing issue for Ethereum’s future scalability in emerging markets (EM).
“We want to avoid a situation where emerging markets are unable to benefit from the great ecosystem that the Ethereum network provides.”
He said that as L2 solutions improve, Ethereum could become “the cornerstone of the global digital economy,” greatly benefiting these regions. Both Ethereum and L2 addresses have surged 127% in the last year, indicating an increase in activity.
If given the proper attention, this could have a domino effect on the necessary improvements that Schewenter hinted at.
2. Tokenization of Real World Assets (RWAs)
Schwenter also highlighted the benefits of tokenizing real-world assets for emerging markets.
“RWAs allow for increased access to capital in regions where traditional financial services are often limited.”
By reducing transaction costs and enhancing liquidity, RWA tokenization promotes financial inclusion.
This will enable emerging markets to take a big step towards an optimal hybrid financial system that optimally connects them to the rest of the world, while transforming industries and empowering individuals around the world.
3. Stablecoins Power Financial Inclusion
Amanda Cassatt, founder and CEO of Serotonin and former head of marketing at Consensys, reflects on the role that stablecoins have played in achieving what she calls Ethereum’s original goal of “banking the unbanked.”
She has witnessed the impact of stablecoins in emerging markets like the Philippines, where they play an important role in facilitating everyday transactions.
“In the early days of Ethereum, I would have been surprised to hear about the level of adoption of stablecoins. A lot of us thought that cryptocurrencies would one day be used for payments on a regular basis, but the idea at the time was a floating token like BTC or ETH.”
“Stablecoins make a lot of sense,” she said, predicting they will become “much more important.”
4. Institutional Crypto Adoption
Cassatt pointed to Ethereum’s role in helping to encourage institutional cryptocurrency adoption, noting the shift from private to public blockchains.
“The popular way of predicting institutional adoption, ‘blockchain without cryptocurrency,’ is now dead. The extent to which institutions have adopted blockchain is because they have adopted cryptocurrency.”
“It’s a good idea,” she said, encouraging that “more people should consider it for balance sheets.” This might even look like investing in assets like ETFs, which just made a historic entry into the market on July 23.
5. Ethereum as a settlement layer
Matt Katz, co-founder and CEO of Caldera, said Ethereum has evolved from an application development platform to a powerful settlement and data availability layer for numerous Rollups.
“These advancements in scaling will open the door to mass-market applications in areas such as decentralized physical infrastructure networks (DePINs), gaming, and social platforms.”
Katz attributed this evolution to Optimistic and ZK proofs, which allow applications to safely “rent” Ethereum’s security at an affordable price.
6. Distribution and Infrastructure Investment
Cassatt also shed light on investment trends within the Ethereum ecosystem, noting that when Ethereum first became successful, venture capitalists (VCs) invested heavily in layer 1 and layer 2 solutions rather than applications built on Ethereum.
“The risk/reward profile of infrastructure investing attracted VCs and attracted builders who wanted VC backing.”
Cassatt said the next era needs to focus on proving that applications can succeed and bring returns on capital. She stressed the importance of distribution, citing Telegram and the TON ecosystem as a promising area.
“Telegram has the potential to be a non-government controlled version of WeChat, with a fully integrated self-sovereign wallet and the ability to bring significant activity on-chain,” she explained. As regulation becomes clearer, Cassatt said she expects more companies with real distribution to enter the crypto space, driving industry growth.
7. Simplifying the user experience through account abstraction
Charles Wayn, co-founder of Galxe, said he is particularly excited about the development of account abstraction, which simplifies the user experience and allows for more flexible transaction models.
“This means easier wallet management, enhanced security, and the ability to seamlessly execute more complex transactions,” he explained. He believes this innovation will make Ethereum more accessible and usable by a wider audience.
8. Commitment to open source and decentralization
Karl Floersch, co-founder of Optimism and CEO of OP Labs, stressed the importance of driving open source standards and ecosystem public goods.
“A lot of the crypto narrative is internally centered around fierce competition between big players, but there’s less discussion about how we can effectively build open source software to move us toward an increasingly open internet.”
He quoted Vitalik Buterin: “We’re not here to create isolated tools and games, but to build a more free and open society and economy across the board, where different parts like technology, society, and economy can integrate with each other.”
Floersch believes that there is too much “zero-sum” competition in the current market, and emphasizes the need for economic coordination through programs such as retroactive public goods funding to maintain the vision of a decentralized internet.
9. Ethereum is at a crossroads
The co-founder of Optimism said he hopes to see Ethereum reach the vision of a world computer in terms of both technical capabilities and socioeconomic capabilities.
However, he said that in order to achieve this goal, two things need to happen, the first is an open source technology stack that is decentralized and does not sacrifice user experience, while also providing enough funding for open protocols that benefit the entire ecosystem.
"If we get those two things right, then the question is no longer where Ethereum will be in 10 years, but what a vibrant ecosystem the internet will become."
Wes Levitt, head of strategy at Theta Labs, also believes that Ethereum is at a critical juncture. While Ethereum was a pioneer in expanding the scope of cryptocurrency beyond Bitcoin, it faces competition from other layer 1 blockchains such as Solana.
"How the story will end in the next year or so will be," said Levitt. He believes that Ethereum's ability to maintain its market capitalization dominance, especially with the launch of new ETFs, is critical to solidifying its position in the cryptocurrency ecosystem.
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