Justin Sun Asked ‘What Happened to Ethereum?’: Here’s The Answer
Crypto leader Justin Sun, President of Liberland and Founder of Tron recently tweeted, “What exactly happened to Ethereum?” His question has sparked discussion in the crypto community. Yet, key responses explain the challenges Ethereum is currently facing.
Before Ethereum’s recent upgrade, Layer 2 (L2) networks were major buyers of ETH. They used it for transactions and token burns, which reduced Ethereum’s overall supply and strengthened the network. This system supported projects like Celestia and Avail, helping Ethereum maintain deflationary appeal. But now things have changed.
What exactly happened to Ethereum?
— H.E. Justin Sun 🍌 (@justinsuntron) March 12, 2025
Justin Sun Ethereum Criticism: A Major Upgrade Shifted the Market For Ethereum
After the upgrade, things changed. Now, L2s are selling more ETH than they buy. This means Ethereum’s supply is increasing instead of shrinking, making it less attractive as a deflationary asset. Investors are concerned because this shift weakens the network’s stability.
It’s been death every since the blob upgrade. Before the blob upgrade, the L2’s were huge buyers of eth through token burn. Plus it supported coins like celestia and avail. Since the blob upgrade, the l2’s net sell eth. The eth supply is going up. It was going down before.
— Solanasaurusrex.sol (@Christo86383094) March 12, 2025
ETH has already transitioned to a proof-of-stake (PoS) system, but it still struggles with high transaction fees and slow scalability. PoS was meant to make Ethereum more efficient but hasn’t solved these key issues. Meanwhile, newer L2s like Starknet offer cheaper and faster transactions, making Ethereum look less competitive.
Another major concern is decentralization. Under its old proof-of-work (PoW) system, Ethereum had a more decentralized and secure foundation. But since moving to PoS, it has lost some of that independence. It’s stuck between its old PoW legacy and its new PoS structure—without fully committing to either.
No clear vision.
Either PoW for sovereignty and decentralization OR PoS with very low fees and scalability.
But right now they have a foot in both camps which makes the protocol too costly compared to other L2s like Starknet and not very decentralized like it was with PoW.
— Tom Megati (@TomMegati) March 12, 2025
Ethereum’s attempt to balance both worlds isn’t working. It’s more expensive than competing L2s but less decentralized than it used to be. This uncertainty confuses users and weakens Ethereum’s position in the market.
Justin Sun’s tweet highlights real concerns. The recent upgrade, rising ETH supply, and lack of a clear strategy have all created challenges. With high fees and poor scalability still major issues, Ethereum must make a choice:
Should it focus on being highly decentralized and sovereign?
Or should it prioritize lower fees and better scalability?
Vitalik pic.twitter.com/wDvXoRKfeI
— Robin Nakamoto (@RobinNakamoto) March 12, 2025
Until Ethereum makes a clear decision, its struggles will likely continue.
Key Takeaways
Ethereum’s Upgrade Changed the Market – L2s are now selling more ETH than they buy, increasing supply and weakening its deflationary appeal.
Scalability and Fees Remain an Issue – Despite PoS, Ethereum still struggles with high costs and slow transactions, while L2s like Starknet offer better alternatives.
Decentralization Is Weaker – Moving from PoW to PoS reduced Ethereum’s independence, leaving it without a clear direction.
Ethereum Needs a Clear Strategy – It must choose between decentralization and scalability to remain competitive.
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Justin Sun Asked ‘What Happened to Ethereum?’: Here’s The Answer
The post Justin Sun Asked ‘What Happened to Ethereum?’: Here’s The Answer appeared first on BTC Ethereum Crypto Currency Blog.
Filed under: News - @ March 13, 2025 5:23 pm