Justin Sun Asked ‘What Happened to Ethereum?’: Here’s The Answer

Crypto chief Justin Sun, President of Liberland and Founding father of Tron lately tweeted, “What exactly happened to Ethereum?” His query has sparked dialogue within the crypto group. But, key responses clarify the challenges Ethereum is at present going through.

Earlier than Ethereum’s latest improve, Layer 2 (L2) networks have been main consumers of ETH. They used it for transactions and token burns, which lowered Ethereum’s general provide and strengthened the community. This method supported initiatives like Celestia and Avail, serving to Ethereum preserve deflationary enchantment. However now issues have modified.

What precisely occurred to Ethereum?

— H.E. Justin Sun (@justinsuntron) March 12, 2025

Justin Sun Ethereum Criticism: A Main Improve Shifted the Market For Ethereum

After the improve, issues modified. Now, L2s are promoting extra ETH than they purchase. This implies Ethereum’s provide is growing as an alternative of shrinking, making it much less engaging as a deflationary asset. Buyers are involved as a result of this shift weakens the community’s stability.

It’s been loss of life each because the blob improve. Earlier than the blob improve, the L2’s have been big consumers of eth by token burn. Plus it supported cash like celestia and avail. For the reason that blob improve, the l2’s web promote eth. The eth provide goes up. It was happening earlier than.

— Solanasaurusrex.sol (@Christo86383094) March 12, 2025

ETH has already transitioned to a proof-of-stake (PoS) system, however it nonetheless struggles with excessive transaction charges and sluggish scalability. PoS was meant to make Ethereum extra environment friendly however hasn’t solved these key points. In the meantime, newer L2s like Starknet provide cheaper and sooner transactions, making Ethereum look much less aggressive.

One other main concern is decentralization. Underneath its outdated proof-of-work (PoW) system, Ethereum had a extra decentralized and safe basis. However since transferring to PoS, it has misplaced a few of that independence. It’s caught between its outdated PoW legacy and its new PoS construction—with out absolutely committing to both.

No clear imaginative and prescient.

Both PoW for sovereignty and decentralization OR PoS with very low charges and scalability.

However proper now they’ve a foot in each camps which makes the protocol too expensive in comparison with different L2s like Starknet and never very decentralized prefer it was with PoW.

— Tom Megati (@TomMegati) March 12, 2025

Ethereum’s try and stability each worlds isn’t working. It’s costlier than competing L2s however much less decentralized than it was. This uncertainty confuses customers and weakens Ethereum’s place out there.

Justin Sun’s tweet highlights actual considerations. The latest improve, rising ETH provide, and lack of a transparent technique have all created challenges. With excessive charges and poor scalability nonetheless main points, Ethereum should make a alternative:

Ought to it give attention to being extremely decentralized and sovereign?
Or ought to it prioritize decrease charges and higher scalability?

Vitalik pic.twitter.com/wDvXoRKfeI

— Robin Nakamoto (@RobinNakamoto) March 12, 2025

Till Ethereum makes a transparent choice, its struggles will seemingly proceed.

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Key Takeaways

Ethereum’s Improve Modified the Market – L2s at the moment are promoting extra ETH than they purchase, growing provide and weakening its deflationary enchantment.
Scalability and Charges Stay an Concern – Regardless of PoS, Ethereum nonetheless struggles with excessive prices and sluggish transactions, whereas L2s like Starknet provide higher options.
Decentralization Is Weaker – Transferring from PoW to PoS lowered Ethereum’s independence, leaving it and not using a clear route.
Ethereum Wants a Clear Technique – It should select between decentralization and scalability to stay aggressive.

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