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Justin Sun asked, “What happened to Ethereum?”: This is the answer

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Justin Sun, president of Liberland and founder of Tron, recently tweeted, “What exactly happened to Ethereum?” His questions sparked debate in the crypto community. However, the key answer explains the challenges Ethereum is currently facing.
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Prior to the recent upgrade of Ethereum, the Layer 2 (L2) network was the main buyer of ETH. They used it for transactions and tokenburns, reducing the overall supply of Ethereum and strengthening the network. The system supported projects such as Celestia and Away, helping Ethereum maintain the appeal of deflation. But now things have changed.

Justin San Ethereum Criticism: Major upgrades shift Ethereum market

Things changed after the upgrade. Currently, the L2 sells more ETH than it buys. This means that Ethereum's supply is increasing rather than shrinking, making it unattractive as a Deflation asset. This shift is concerning investors as it weakens network stability.

ETH has already moved to a Proof-of-Stake (POS) system, but struggles with high transaction fees and slow scalability. The POS was intended to make Ethereum more efficient, but these important issues have not been resolved. Meanwhile, newer L2s like StarkNet offer cheaper and faster transactions, while Ethereum reduces competitiveness.
Another major concern is decentralization. Under its old proof (POW) system, Ethereum had a more decentralized and secure foundation. However, since moving to POS, it has lost some of its independence. It's stuck between its old Pow heritage and the new POS structure.
Ethereum's attempt to balance both worlds is not working. It's more expensive than the competing L2, but less decentralized than before. This uncertainty disrupts users and weakens Ethereum's position in the market.
Justin Sun's tweet highlights real concern. Recent upgrades, increased ETH supply and lack of a clear strategy all created challenges. High prices and low scalability still have major issues, so Ethereum has to make a choice.
  • Should it be highly decentralized and focused on sovereignty?
  • Or should lower rates and better scalability be prioritized?
The struggle could continue until Ethereum makes a clear decision.
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Key takeout

  • Ethereum upgrades have changed the market. L2S currently sells more ETH than its purchase, increasing supply and undermining the appeal of deflation.

  • Scalability and pricing remain an issue. Despite the POS, Ethereum still struggles with high costs and slow trading, but L2s like StarkNet offer better alternatives.

  • Decentralization is weakened – moving from Pow to POS reduces Ethereum's independence and lacks a clear direction.

  • Ethereum requires a clear strategy. To stay competitive, you need to choose between decentralization and scalability.

Justin Sun's post asked, “What happened to Ethereum?” This is the first answer that appeared in 99 Bitcoin.





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