The cryptocurrency world has seen shifting tides. While Solana has surged back into the spotlight, Ethereum (ETH) has underperformed in comparison—especially against Bitcoin, with ETH/BTC hitting new lows. Amid growing scrutiny over the Ethereum Foundation’s frequent ETH expenditures and its $100 million annual budget, even Vitalik Buterin’s disclosed $182,000 salary sparked debate. The Ethereum ecosystem is under a microscope like never before.
Eight months after their last public engagement, the Ethereum Foundation’s research team returned to Reddit for their 12th AMA session, addressing pressing concerns head-on. Topics ranged from ETH price drivers and funding longevity to technical upgrades like EIP-4844 (blobs), zero-knowledge (ZK) technology, rollups, and long-term scalability.
Below is a curated and refined analysis of key insights from that session—offering clarity on whether ETH still has room to grow, how the network plans to scale, and what lies ahead for one of the most influential blockchains in the world.
Why Could ETH Price Increase?
The Core Value Proposition of Ethereum
At the heart of the debate: Can Ethereum remain the dominant smart contract platform—and if so, will ETH reflect that value?
Dankrad Feist, a core researcher, emphasized Ethereum’s role as a neutral financial platform. He envisions it enabling permissionless issuance, trading, and creation of financial instruments—like derivatives—on a decentralized foundation. This activity generates economic value, which can be captured via transaction fees or data availability charges.
"Ethereum L1 will become a convergence point for high-value activity," Feist noted. "Even if fees per transaction are low, massive volume can still generate substantial revenue."
Anders Elowsson expanded on this by linking ETH’s value directly to sustainable economic activity. When real-world use cases emerge—such as DeFi, NFTs, or tokenized assets—payments made in ETH get burned through EIP-1559, effectively redistributing value to all ETH holders.
"ETH becomes valuable because it's the trustless asset within the ecosystem," Elowsson explained. "When transactions settle in ETH and part of that fee is burned, every holder benefits."
Justin Drake kept it simple: "ETH is money." But he meant it seriously—as digital cash with programmable properties. For Ethereum to succeed as the "settlement layer of the internet of value," ETH must become the de facto programmable digital currency.
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Does the Ethereum Foundation Care About ETH’s Price?
While the Foundation avoids official stances on price, individual researchers shared candid perspectives.
Feist stressed that focusing on value creation comes before value capture. In other words: build utility first; price appreciation follows naturally.
Elowsson highlighted three key reasons why rising ETH prices matter:
- Network Security: Ethereum relies on staked ETH for consensus. Higher ETH value means greater economic security against attacks.
- Monetary Stability: A stable, appreciating ETH strengthens its role as a reliable decentralized currency.
- Treasury Health: The Foundation holds ETH reserves. Its long-term sustainability depends on maintaining value.
Drake took it further: "If ETH doesn’t gain monetary premium, Ethereum cannot become the global settlement layer." He believes two metrics are critical:
- Total fee revenue, not per-transaction cost
- ETH usage as collateral, especially in DeFi protocols
He projected a future where Ethereum handles 10 million transactions per second. Even at $0.002 per transaction, that’s over $2 billion in daily revenue—fueling demand for ETH.
Could Ethereum Succeed Without ETH Appreciating?
This hypothetical scenario—robust ecosystem, cheap L2 transactions, but flat ETH price—sparked deep reflection.
Feist likened it to a startup solving real problems but failing financially. "It would still be a success if users benefit—but greater success includes value accrual to ETH."
Elowsson argued that long-term sustainability and ETH price growth are intertwined. A thriving economy should naturally increase demand for its native asset.
Drake reiterated: short-term focus on price without underlying utility leads to bubbles. But long-term success without price growth? Unlikely—and possibly a buying opportunity if markets misprice fundamentals.
How Long Can the Ethereum Foundation Last Financially?
A major concern: Is the Foundation burning through reserves too quickly?
Justin Drake provided rare transparency:
- Annual spending: ~$100 million
- Main wallet holdings: ~$650 million in ETH
- Additional fiat reserves: Enough to cover several years
- Overall runway: Roughly 10 years, depending on ETH price volatility
Notably, past regulatory restrictions paused ETH sales for funding operations, but those reserves have since been replenished.
The Foundation remains financially stable—for now—with ongoing efforts to enhance decentralization and censorship resistance through initiatives like FOCIL (Fork Choice-enforced Inclusion Lists), ensuring validators can’t be pressured into blocking transactions.
What’s Next for Ethereum L1 Scaling?
Despite the rollup-centric roadmap, L1 innovation continues.
Dankrad Feist believes L1 execution scaling should progress alongside rollups. Key bottlenecks today include state access and single-threaded processing—but solutions like zkEVMs and parallelization could boost capacity 10x–1000x.
Justin Drake sees SNARK-based EVM validation as the endgame:
- Validators verify lightweight proofs instead of re-executing transactions
- Gas limits can rise dramatically without increasing node burden
- Enables “native rollups” via EVM-in-EVM precompiles—unlocking infinite sharding potential
"Users could run full nodes on phones or watches," Drake said—a vision of ultra-accessible decentralization.
ZK Research Focus Areas
The Ethereum Foundation is deeply invested in zero-knowledge tech:
- STARKed Merkle trees for stateless clients
- Recursive SNARKs for signature aggregation
- ZK anonymity credentials for network-layer privacy
- Post-quantum signatures using STARKs
- zkEVM formal verification, backed by a $20M budget
While VDFs (Verifiable Delay Functions) were once high-priority for improving RANDAO randomness, their urgency has decreased due to lack of observed exploitation.
However, Drake sees promise in non-consensus uses—like provably fair global lotteries ("world lottery") or synchronized block proposals.
EIP-4844 and Blob Market Dynamics
EIP-4844 introduced blobs—temporary data storage for rollups—reducing L2 costs significantly.
But questions remain about pricing mechanisms:
- Current blob usage is below target (3 per block) → slower price discovery
- No need to lower targets: Low demand during non-congestion is normal
- Potential fixes: Raise minimum base fee slightly (EIP-7762), adjust update frequency
Davide Crapis noted that while blob fees contribute little to protocol revenue today, they enable a strategic advantage: Ethereum becomes the most secure data availability layer, outpacing rivals like Celestia or Avail.
Still, Feist cautioned: "Blob fees won’t be Ethereum’s primary value capture mechanism." True value lies in becoming the financial hub for high-value settlements.
Drake remains optimistic: "Demand will grow—it just takes time." Optimizations by Base, Scroll, and Taiko are already expanding blob utilization.
Other Key Developments
- Ethereum State Expiry (EIP-4444): Progressing to reduce node storage burden.
- Multidimensional EIP-1559: Being explored to better manage resource pricing.
- MEV Research: Focused on ePBS (execution proposer boosting system) and FOCIL for anti-censorship.
- Staking Issuance Curve: A smarter, adaptive curve (e.g., tapering issuance beyond 25–50% staked) is seen as ideal—but requires social coordination.
Frequently Asked Questions (FAQ)
Q: Is Ethereum’s development slowing down?
A: No. While public updates are less frequent, core teams are advancing SNARKs, ZK-EVMs, anti-censorship tools, and scalability upgrades—all critical for long-term dominance.
Q: Can ETH reach new highs despite competition?
A: Yes—if Ethereum captures high-value financial activity and maintains its security lead. Network effects and institutional adoption could drive renewed momentum.
Q: Are blob fees hurting L2 projects?
A: Not significantly. Higher blob costs are passed to users, reducing demand temporarily—self-correcting the market. Long-term, cheaper data access benefits all L2s.
Q: Will staking rewards drop further?
A: Possibly. If a dynamic issuance model is adopted, rewards may decline as staking participation increases—balancing security and inflation.
Q: How does ZK tech benefit regular users?
A: Through cheaper, faster L2s; enhanced privacy; and stronger security via formal verification and fraud-proof systems.
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Final Thoughts: ETH’s Path Forward
Ethereum isn’t just surviving—it’s evolving. From SNARKed execution to native rollups and anti-censorship architecture, the foundation is building for a future where scalability meets sovereignty.
ETH’s price may not surge overnight, but if Ethereum fulfills its vision as the neutral settlement layer for global digital economies, value accrual to ETH becomes inevitable.
The roadmap is clear. The technology is advancing. Now it’s up to adoption—and markets—to catch up.
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