Author: David, Deep Tide TechFlow

Do you still care about Ethereum?

On February 3 of this year, Vitalik posted something on X.

No long speeches, just one sentence: The original vision of L2 and its role in Ethereum is no longer reasonable. We need a new path.

For the past five years, the entire scalability roadmap of Ethereum has been built on L2. The mainnet is responsible for security and settlement, while all execution tasks are handed over to L2. Rollups, bridges, cross-chain messaging... the entire architecture was designed under the leadership of Vitalik himself.

Now the designer himself has said that this path is incorrect.

Less than two months later, on March 29 at the EthCC Cannes conference, Gnosis co-founder Friederike Ernst and zero-knowledge proof developer Jordi Baylina took the stage to release something called EEZ:

The full name is Ethereum Economic Zone.

The Ethereum Foundation co-funded this, with protocols like Aave joining as founding members. What EEZ aims to do can be summarized in one sentence: to eliminate the isolation of all L2s and turn them into a connected continent.

The direction is certainly correct.

But the issue is that this archipelago has been built for five years... the island was once prosperous, but now there are definitely no people left. Is it too late to start repairing the tunnel now?

Better late than never?

From the name EEZ, it can actually be seen what Ethereum wants to do.

The logic of special economic zones is well understood: unified rules within the zone, free flow of capital, no checkpoints. In the past, more than twenty L2s on Ethereum were like more than twenty small economies, each having customs, currency, and customs procedures, and a sum of money from Arbitrum to Base would require an intermediary for currency exchange.

What EEZ aims to do is to eliminate tariffs, unify currencies, and dismantle customs, allowing operations on any chain to directly access contracts on another chain, settling back to the Ethereum mainnet, with gas fees standardized to ETH.

Does that sound familiar?

The stories told by LayerZero and Wormhole were pretty similar. Connecting all chains, free flow of assets... it’s all an old routine.

The difference here is that those cross-chain protocols are asynchronous. For example, if you initiate an operation on chain A, chain B will execute it later, with delays and risks of failure, and the bridges themselves remain a hacker's favorite target.

Now this EEZ is synchronous; contracts on both chains execute simultaneously within a single transaction, either both succeed or both roll back. The technical prerequisite to achieve this is real-time verification of Ethereum blocks.

This was previously impossible. For two chains to operate synchronously, the premise is that both parties can verify each other’s ledgers in real-time, but Ethereum produces a new block every 12 seconds, and the speed of verifying the previous block has always lagged behind. Before the accounts are reconciled, the next block is already upon us.

This year, this speed has technically been caught up with, making synchronous operations a reality for the first time. Hence the proposal of EEZ.

The direction is fine. But if you check Twitter, who is still talking about Ethereum now?

It's not just Ethereum that is cold; the entire industry has quieted down. Last year there was the frenzy over meme coins, the rise of Solana, and the peak of AI Agents. Since the beginning of this year, no narratives have emerged.

Ethereum is just colder than ever—ETH has fallen from $4800 at the end of 2025 to just over $2000 now, evaporating over 60%. There is hardly any anger in the community, but more of a fatigued silence.

Locking the barn door after the horse has bolted?

But looking at on-chain data, you will see a completely different picture.

According to AMBCrypto, the supply of stablecoins on the Ethereum mainnet still stands at around $163.3 billion. In a $16.5 billion on-chain real asset market, Ethereum holds 58%. Last year, Ethereum's spot ETF had a net inflow of $9.9 billion. DeFi TVL remains the highest in the entire industry, at about $53 billion.

The people may be gone, but the money is still here. And it's not retail money; it's institutional money.

The Ethereum Foundation’s own actions also point in the same direction. They paused the public grant program mid-last year, reducing the spending rate to below 5% per year. But just last week, they completed the largest single staking in history—22,517 ETH, worth about $46.2 million, locked into the Beacon Chain.

While cutting the budget, locking money in the treasury, and also funding the latest interoperability solution that arrived the latest.

All these actions together point to one judgment: the island era of Ethereum has indeed ended. But what replaces it is not a bustling continent.

It's a treasury.

Quiet, solid, filled with institutional assets. There may not be many people living there, but it locks up the most money in the entire industry.

The treasury has no tax revenue; Ethereum isn’t making money

Ethereum's economic model has a very simple cycle:

Users transact on the mainnet, transactions generate gas fees, and a portion of the ETH in those gas fees is permanently destroyed. The more people using it, the more is burned, and the supply of ETH keeps decreasing.

This mechanism was just getting underway in 2022, and the community gave it a name: ultrasound money. It meant that ETH not only resisted inflation but was also deflationary — harder than Bitcoin.

This narrative held for two years. Then L2 dismantled it.

As a large number of transactions moved from the mainnet to L2, revenue from gas fees on the mainnet plummeted. According to BitKE, Ethereum's mainnet revenue has decreased by about 75% over the last two years. There was a week when the blob fees generated from L2 submitting data to the mainnet only amounted to 3.18 ETH.

3.18 ETH, at the time's price, was about $5000.

A network with a TVL of $53 billion, earning a week's blob revenue enough to host a decent Chinese New Year dinner in Shanghai.

It's not burning enough, and supply can’t be controlled. In February this year, the supply of ETH officially turned into a net increase, with an annual inflation rate of about 0.74%. "Ultrasound money" has become an outdated marketing slogan.

This is the cost of the L2 roadmap. With users and transactions moving to L2, L2 has consumed the fee income, leaving the mainnet with only the task of settlement. Settlement is important, but it doesn’t make money.

For example, Ethereum built a special economic zone and moved all the factories and shops in. The special zone is bustling. But tax revenues belong to the special zone itself, while central fiscal income is decreasing. The EEZ scheme mentioned in the previous chapter aims to reconnect the special zone to the center, but what returns is liquidity, not tax revenue.

The institutional money is locked in the treasury, very safe. But in the treasury itself, the asset ETH is becoming increasingly difficult to narrate due to lack of income.

The price dropped from $4800 to $2000; it's not just an emotional issue. When the core narrative of an asset shifts from "deflationary" to "actually still inflationary," the market will reprice.

The situation Ethereum is facing now is:

The strongest infrastructure in the entire industry, the most institutional capital in the entire industry, but the economic model is leaking. EEZ fixes fragmentation but cannot fix this.

A house with no one living in it, is it worth anything?

Returning to the initial question: Do you still care about Ethereum?

The honest answer for most people might be that they don’t care much anymore. ETH isn’t rising, the narrative has expired, it’s troublesome to use, it’s not as good as neighboring Solana.

But let’s ask it a different way: Do you care about the water pipes in your building?

No, as long as there’s water when you turn on the faucet. You don't study the purification technology used by the water plant, don’t care what material the pipes are made of, and you certainly don’t post on social media about the brand of the water pipe.

Ethereum is becoming that water pipe.

With a TVL of $53 billion, $163.3 billion in stablecoins, 58% of the entire industry’s real assets, and nearly $10 billion in ETF inflows each year... these numbers indicate one thing, that the on-chain underlying settlement of global crypto finance is still largely completed on Ethereum.

Not because users prefer Ethereum, but because institutions cannot find another pipe of the same width.

The economic zone EEZ is essentially working to enlarge the caliber of this pipe—allowing institutional funds to flow faster between L2s and reducing settlement friction. This effort is useful, even necessary.

But pipes have a characteristic: no one is willing to pay a premium for them.

Water companies are one of the most important infrastructures in a city, but have you ever seen a water company's PE ratio higher than that of an internet company? The global clearing giant DTCC processes over $20 trillion in transactions each year, yet hardly anyone discusses its stock price.

If Ethereum really moves toward treasury and piped status, it will become extremely important while also extremely boring. Important enough for all institutional money to flow through here, boring enough that no retail investor would want to hold ETH waiting for it to rise.

But today, most people holding ETH are still pricing it according to the "city" logic. Users will grow, the ecosystem will prosper, L2 will feed back to the mainnet, the coin price will reach new highs? This is the story that the Ethereum community has been telling itself for the past five years.

The reality is that Ethereum is becoming SWIFT, not New York.

SWIFT processes $150 trillion in cross-border payments every year; the global financial system cannot do without it. But no one trades SWIFT stocks because the valuation logic of infrastructures is stable.

ETH has dropped from $4800 to $2000; it’s not just an emotional issue, but the market is re-understanding what this asset truly is.

If the future of Ethereum is a treasury, then the reasonable pricing of ETH should not depend on user numbers and ecological heat, but rather on how much value it can capture each year as a settlement layer. At the current income level of $5000 per week from the mainnet’s blob, this answer does not look good.

The island era is over. EEZ has arrived, and institutional money is still here. But for those holding ETH, the real question to think through is just one:

Are you buying a house in a city, or the right to use a pipe?