Recent market dynamics have seen Solana's resurgence, while Ethereum's performance has lagged behind expectations. The ETH/BTC exchange rate has repeatedly hit new lows, and concerns have mounted due to frequent ETH sales from Ethereum Foundation-associated addresses. With an annual budget of approximately $100 million and even Vitalik Buterin revealing his modest salary, the Foundation has been under intense scrutiny.
Addressing these concerns head-on, the Ethereum Foundation Research Team recently hosted their 12th Ask-Me-Anything (AMA) session on Reddit. The event covered a wide range of pressing topics, including potential catalysts for ETH's price appreciation, the Foundation's financial runway, and technical developments like EIP-4844 (blobs), ZK-proofs, and Rollups.
This article distills the core insights from that discussion, focusing on the researchers' perspectives. It's important to note that these views are their own and not official statements from the Ethereum Foundation.
Key Factors Influencing Ethereum's Price Trajectory
What Are the Primary Drivers for ETH's Price in 2024?
According to researcher Dankrad Feist, Ethereum is building a neutral financial platform for issuing assets, facilitating trades, and creating permissionless financial products like derivatives. He believes value will be captured through fee mechanisms, especially if Layer 1 (L1) becomes the central hub for high-value activities, provided it scales sufficiently. Alternatives include data availability fees or using ETH as collateral, though the latter carries higher risk.
Anders Elowsson posits that ETH gains value when Ethereum facilitates sustainable economic activity—utility-driven actions that ensure long-term viability. In such an ecosystem, ETH becomes the preferred, trustless asset for holding and transacting, and fees paid in ETH are burned, effectively distributing value to all holders.
Justin Drake offered a succinct view: "ETH is money."
Does the Ethereum Foundation Care About ETH's Price Growth?
The researchers clarified that the Foundation itself does not have an official stance, but individual contributors certainly do.
Dankrad Feist's personal opinion is that the focus should be on building a valuable ecosystem, with the belief that value capture will follow naturally. Prioritizing capture before sufficient value generation is a mistake.
Anders Elowsson suggested several reasons why ETH's appreciation matters: it ensures the network's economic security through staking, it provides a reliable, trustless货币 for the decentralized economy, and future ecosystem investments will likely be held in ETH. He sees a direct link between sustainable activity on Ethereum and long-term ETH value.
Justin Drake was unequivocal, stating that ETH's price growth is absolutely critical for Ethereum's success. He believes that for Ethereum to become the settlement layer for the "internet of value," ETH must become the de facto "programmable money of the internet." This monetary premium is necessary to support trillion-dollar decentralized stablecoins (economic bandwidth), provide unquestionable security against nation-state attacks (economic security), and attract global economic attention (economic significance).
Could Ethereum Succeed Even If ETH's Price Stagnates?
This hypothetical scenario questions the success of the roadmap if rollups thrive on L1, DApps flourish on L2 with sub-cent fees, but ETH's price doesn't budge.
Dankrad Feist likened it to a startup: even if he didn't personally profit, creating something useful for customers would be a success. Therefore, a diverse rollup ecosystem providing compelling applications would be a win. However, a scenario where the ecosystem also boosts ETH's value would be a greater success. He dismissed the notion that rollups are parasitic; instead, he sees a symbiotic relationship where L1 handles high-value transactions and provides cheap data availability to rollups, which in turn massively expand the ecosystem's transaction capacity.
Anders Elowsson argued that designing for sustainable economic activity is inherently designing for ETH's price growth in the long run. He would be surprised and disappointed if Ethereum succeeded without ETH appreciating, viewing such a situation as a potential market mispricing and a buying opportunity.
Justin Drake pointed to capital flows and monetary premium. The key metric for flows is total fees, not per-transaction cost. He envisions an endgame with 10 million transactions per second. Even at $0.002 per transaction, this could generate ~$2 billion in daily revenue. For monetary premium, the crucial metric is ETH's usage as collateral within DeFi.
The Financial Health of the Ethereum Foundation
How Long Can the Ethereum Foundation Operate?
Based on his limited understanding, Justin Drake shared:
- A new financial report is expected soon.
- The Foundation's annual expenditure is around $100 million.
- Its primary Ethereum wallet holds roughly $650 million worth of ETH.
- It also maintains a fiat currency reserve sufficient for several years of operations (though this was paused temporarily due to regulatory concerns).
A rough estimate suggests the Foundation has a runway of about a decade, though this fluctuates significantly with the price of ETH.
Ensuring Network Neutrality Against Censorship
In response to questions about resisting government pressure to censor transactions, contributor s0isp0ke highlighted the work of the Robust Incentives Group (RIG). For over a year, they have been iterating on "Inclusion List" (IL) designs to enhance censorship resistance.
ILs allow a decentralized collective of validators to force the inclusion of transactions into blocks proposed by builders. This reduces reliance on a small number of sophisticated entities who might arbitrarily decide to censor transactions (e.g., those interacting with sanctioned addresses). A recent proposal, Fork Choice Enforced Inclusion Lists (FOCIL), relies on a committee of proposers to create a list of transactions that must be included for a block to be considered valid.
The Future of Ethereum Layer 1 and Core Tech
Is There a Plan to Scale Ethereum L1 After the Rollup-Centric Roadmap?
Dankrad Feist believes scaling L1 execution should remain a goal, parallel to building rollups. The two are not mutually exclusive:
- Data Availability can scale nearly infinitely, limited only by interest in running full nodes.
- Execution is ultimately limited by single-thread constraints, with state access being the current bottleneck.
- With zkEVMs and parallelization, he expects L1 capacity to increase by 10-1000x, with rollups providing the rest to achieve "world scale."
Justin Drake outlined a long-term vision using SNARKs to scale L1 EVM execution with virtually no limits. Real-time L1 EVM SNARKing would allow validators to verify cheap SNARK proofs instead of re-executing transactions, enabling a much higher gas limit without burdening validators. Specialized nodes would handle the heavy execution off-chain. This could even enable "native rollups" via EVM-in-EVM precompiles, allowing for programmable, unlimited execution shards.
What Are the Key Focus Areas in ZK Research?
George Kadianakis listed several L1-related ZK projects at various stages:
- STARKed hash trees for statelessness.
- Recursive SNARKs for large-scale signature aggregation.
- ZK anonymous credentials for network robustness.
- STARKs for post-quantum aggregatable signatures.
- ZK for privacy in single secret leader election (SSLE).
- Using ZK and zkEVM for L1 execution (a long-term goal).
Justin Drake expressed excitement about SNARKifying the L1 EVM, noting that the cost to prove all L1 blocks is already around $1M per year and falling rapidly due to ongoing optimizations, SNARK ASICs, and formal verification efforts led by the EF.
Understanding EIP-4844 and Blob Economics
Are There Issues with the Current Blob Fee Mechanism?
Davide Crapis acknowledged the mechanism has room for improvement but wasn't concerned about fees becoming permanently too high for L2s. He explained that high L1 data costs are passed down to L2 users, reducing demand for L2 transactions, which in turn creates downward pressure on blob demand and prices. Dankrad Feist concurred, noting this natural economic feedback loop.
Should the Blob Target Be Lowered If Usage Is Low?
Davide Crapis argued against lowering the target. The mechanism is designed to price congestion, so low prices during low demand are normal. However, demand far below the target affects price discovery during congestion. Short-term adjustments, like a slightly higher minimum fee or a changed update speed, could improve the mechanism's efficiency without reducing the target. Explore more strategies on data pricing here.
Dankrad Feist added that Ethereum is creating a new data availability market competing with alternatives like Celestia. While competitors can't match Ethereum's security, they will compete on price. He suggested focusing on expanding this market rather than急于 extracting fees from it immediately, as the highest-value transactions will naturally occur on Ethereum L1, which is a better mechanism for ETH's value capture.
Frequently Asked Questions
Q: What is the single biggest reason to be bullish on ETH?
A: The convergence of its role as a trustless monetary asset within its ecosystem and the value accrual mechanism from fee burning. As sustainable economic activity on Ethereum grows, demand for ETH as both fuel and a store of value increases.
Q: Is the Ethereum Foundation selling ETH a sign of trouble?
A: Not necessarily. The Foundation sells ETH to cover its operational expenses in fiat currency. This is a known part of its treasury management strategy and is not inherently a bearish signal for the asset's long-term value.
Q: How do blobs actually help scale Ethereum?
A: Blobs, introduced in EIP-4844, provide a dedicated and much cheaper data space for rollups to post their transaction data. This significantly reduces the cost for Layer 2 solutions to operate securely on Ethereum, which is then passed on to users in the form of lower transaction fees.
Q: What is "The Merge" and did it affect ETH's price?
A: "The Merge" was Ethereum's transition from Proof-of-Work to Proof-of-Stake consensus. It made the network ~99.9% more energy efficient. While a monumental technical achievement, its impact on price is debated, as it was a supply-side change (reducing new ETH issuance) amidst broader market factors.
Q: Can Ethereum be overtaken by another blockchain?
A: Ethereum's main advantages are its massive, established ecosystem, high security through decentralized validation, and a clear, rigorous upgrade roadmap. While competition is fierce, its first-mover advantage, network effects, and continued innovation make it a resilient leader.
Q: How can I stay updated on core Ethereum development?
A: Follow Ethereum Foundation researchers on platforms like Twitter and Reddit. Reading resources like ethresear.ch, Ethereum Magicians forums, and developer calls (e.g., All Core Devs) provides deep insight into ongoing technical discussions. View real-time tools for network analytics here.