The difficulties of Ethereum and the overall landscape of the crypto market

Ethereum (ETH) has long been the undisputed "king" in the world of DeFi, NFT, and smart contracts, holding a central position in the blockchain ecosystem for many years. However, that glory is gradually wavering. Challenges regarding scalability, internal volatility, and the strong rise of competitors like Solana are forcing Ethereum to be more vigilant than ever. So what is really happening? And what future awaits ETH ahead?

The Scale Expansion War

Ethereum's transition to the Proof-of-Stake consensus mechanism (PoS) is seen as a resounding victory for the environment, helping to reduce energy consumption by over 99%. The Merge marks a historic milestone, but the biggest challenge remains unsolved: scalability. Gas fees still spike during peak times, and transaction processing speeds can slow down significantly when network traffic surges. Remember the NFT minting event of the Bored Ape Yacht Club that completely congested the Ethereum network, driving transaction costs to dizzying heights?

Although layer-2 solutions like Arbitrum and Optimism are helping to alleviate the load, Ethereum itself is still struggling under pressure. Infrastructure solutions like Proto-Danksharding and further down the line, full Danksharding, are being developed to address data congestion and reduce fees, but these breakthroughs still need another 1–2 years before they can be fully implemented.

While Ethereum is still struggling, Solana has emerged as a formidable competitor, handling up to 60 million transactions per day, far exceeding Ethereum's figure of less than 1 million. With near-instant speeds and very low fees, Solana is gradually becoming the ideal destination for developers seeking a smoother and more efficient blockchain experience.

Internal fluctuations

The challenges of Ethereum are not limited to the technical aspect. The Ethereum Foundation – the core organization shaping the development direction of the network – is also facing internal upheavals. Many critics argue that the progress of implementing upgrades is too slow, while the continuous adjustment of priorities is causing inconsistency and contradictions in the development strategy.

Decentralization is the core value and a prominent strength of Ethereum. However, this also makes the decision-making and action process slower. In contrast, competitors like Solana, with a more centralized governance model, can make quick and flexible decisions – a significant advantage in the ever-changing world of crypto.

Solana and Rising Stars

Speaking of Solana (SOL), their Proof-of-History (PoH) technology has made a strong impression due to its ability to process thousands of transactions per second with extremely low fees. Solana has established its own position in the fields of NFT, DeFi, and gaming, attracting major projects like Magic Eden and Star Atlas.

Meanwhile, Avalanche is gaining momentum thanks to its customizable subnet system, allowing developers to build their own blockchain ecosystems without worrying about congestion. And don't overlook Aptos – the platform that is attracting users with its developer-friendly tools and high performance.

Is Ethereum over?

Ethereum still dominates in DeFi, the NFT ecosystem, DAOs, and has a very large and growing developer community. According to a report by Electric Capital, Ethereum has over 6,200 active developers monthly, far surpassing its competitors.

In addition, its role as a payment layer for layer 2 networks continues to strengthen the long-term value of Ethereum. Although Solana wins in speed, Ethereum still excels in security, stability, and acceptance. As Devansh Mehta once said:

"Ethereum triumphs thanks to the community... outstanding teams working together in an ecosystem, sharing values of openness, transparency, and a rebellious spirit against power."

If Ethereum fulfills its promise of Proto-Danksharding, then the issue of high gas fees may be resolved and that will change the landscape.

Inflation and the Unexpected Blow to the Crypto Market

While Ethereum is battling technical issues, the crypto market also faces macroeconomic factors – particularly inflation and trade wars. Rising prices have led many to turn to Bitcoin as a safe haven. With a supply capped at 21 million coins, BTC is increasingly deserving of the title "digital gold." It is now not only a speculative asset but also a store of value.

During periods of inflation, stablecoins are also gaining attention. Pegged to the USD, stablecoins are a safe place to hold value in the crypto ecosystem. Indeed, USDC and USDT are increasingly used for money transfers, DeFi lending, and cross-border payments.

Meanwhile, if the Fed begins to cut interest rates, risk assets like Bitcoin, ETH, and altcoins could see significant increases. History shows that loose monetary policy often drives high-growth assets, and crypto is no exception.

The Future Ahead

The future of Ethereum depends on one thing: Can it scale fast enough to maintain its leading position? If the upcoming upgrades are implemented on schedule, Ethereum could easily regain its advantage. But if delays continue, blockchains like Solana will continue to attract projects to themselves.

At the same time, macroeconomic factors are causing many people to pay more attention to Bitcoin, while stablecoins provide a way to hedge value without needing to exit the crypto market.

Whether you are all in on ETH, optimistic about Solana, or exploring new platforms, one thing is certain: the crypto market landscape is changing faster than ever. The best approach right now is to stay informed and hold a flexible strategy.

Dinh Dinh