Never-ending FUD - The Daily Gwei #383

It's just all so tiring.

Ethereum is the very definition of being a “victim of its own success”. It is constantly criticized and ridiculed for literally anything it does (good or bad) and the critics have mastered the arts of mental gymnastics, goalpost moving and gaslighting. The perfect example of this is what happened over the weekend on crypto twitter - if you were lucky enough to avoid the mess then I truly envy you - but for those who saw it all unfold you’ll know exactly what I’m talking about.

There’s not much to say that hasn’t already been said by many of the smartest and most thoughtful Ethereum community members but I did want to add a bit of my own thoughts anyway. I’ll start by saying that I don’t think the “attacks” on Ethereum are ever going away - there is just too much financial upside for the creators of “Ethereum killers” to attack Ethereum’s weaknesses. I mean, look at many of the popular “alt-L1’s” that have gained traction lately - most of them are literally just forks of Geth because the EVM’s network effect is so strong that it’s not worth the time spinning up an entirely new ecosystem. It astounds me that the market keeps rewarding these copy/paste jobs with multi-billionaire dollar market caps which makes both the team and insiders stupidly rich off the back of other people’s work. Of course, this only works in bull markets where there are plenty of new people to fool - and the charlatans take full advantage of this.

The crypto ecosystem suffers greatly from the classic “tragedy of the commons” situation because everything is open-source. Opportunists can easily fork whatever code they want, slap a new token on it, and then advertise it as something “better” than the original code they forked. In reality, it’s never really better - it’s just trading off things like decentralization for scale in order to appeal to popular narratives that are currently present in the crypto ecosystem. Classic examples of this are BSC, Fantom, Avalanche C-Chain and Tron where they are quite literally running a modified version of Ethereum code while simultaneously trashing Ethereum. The sad part is that it works wonders and as long as number is going up, not many people seem to care about anything else.

Now, you may be wondering, why doesn’t Ethereum just take these same trade-offs to achieve scale? Well the regular Daily Gwei reader will know all about Ethereum’s rollup-centric roadmap and why we find it unacceptable to make the same trade-offs that these alt-L1’s have. Of course, this is obviously frustrating for many users because the gas fees on Ethereum layer 1 just keep getting worse and I don’t blame them at all for seeking refuge on other EVM-compatible chains. Though this has never been what I take issue with - what I really despise is the misleading marketing/narratives, the outright lies, the gaslighting and the pure disrespect these other ecosystems have for Ethereum simply because the gas fees are high - it isn’t rational at all and is fueled almost entirely by bag bias.

Unfortunately, I do expect these bad narratives around Ethereum to persist for quite a while because we are only at the start of the transition phase from Ethereum layer 1 to layer 2. Though once most users are sitting at layer 2 and enjoying the cheap and fast transactions they provide, I expect they’ll have a much more positive tone towards Ethereum. One thing that could fast-track both this migration and the killing of these bad narratives is for one of the generalized layer 2 platforms (Optimism, Arbitrum, zkSync or StarkWare) to issue a token. By doing this, the platform will have users with direct skin in the game and will be able to grow an “army” of supporters quite quickly - this is basically what has happened with these alt-L1’s and why their communities are so rabid.

Anyway, I don’t expect any of this to get any better as time goes on - there are just too many financial incentives and egos at play and it’s way too easy to make money by just forking someone else’s code. Though on a more positive note, I have no doubt that the Ethereum ecosystem will keep building and innovating at the breakneck pace that it always has - we just need to ignore the day-to-day bullshit as much as possible and keep moving forward.

Have a great day everyone,
Anthony Sassano

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All information presented above is for educational purposes only and should not be taken as investment advice.