The Ethereum Network is facing a “narrative crisis,” and its community is splitting ETH’s core value proposals.
When welcomed as a foundation for Web3, the Ethereum Ecosystem continues to withstand the shade and gradually question the market’s advantage.
Crypto leaders discuss the crisis of Ethereum’s story
Zach Rynes, a community liaison at ChainLink, argues that Ethereum does not have a unified economic narrative. He cites the disparity that left Ethereum vulnerable to the constant narrative pivot. This weakens investors’ convictions, Rynes said.
“We still have two camps: revenue is the most important story (the story of ultrasound money or yield), and the people who think SOV (value store) is the most important story (programmable money),” says Rynes.
Each side claims as if it was correct, while the other is wrong. However, according to ChainLink Liaison, this threatens Ethereum’s long-term appeal amidst the strengthening of competition.
The ultrasound money story dominated during Ethereum’s peak fare revenue in 2021. But since then, it has been upset, with Layer 2 (L2) networks such as Arbitrum and Optimism absorbing the increased share of gas prices and MEVs (maximum extractable values).
This led to Ethereum reduced Layer-1 (L1) revenues and reduced economic control.
“Ethereum confiscated the most valuable parts of the stack in the L2 and optimized it to the least valuable parts. Now we need an insane on-chain volume to make economics work,” implied Rynes.
On the other side of the discussion, Ethereum educator and angel investor Sassar emphasized that ETH must fully adopt its role as a SOV, not just a Chase Fee-based metric.
“If ETH is valued only on the revenue generated, it would not be much value,” he said.
Ethereum as a valuable store
Sassal argues that sustainable stores of value status rely on widely held narratives, a common belief similar to Bitcoin’s digital gold status. However, Ethereum’s fragmented positioning contrasts sharply with Bitcoin’s consistent branding.
Critics like Planb, the creator of the stock-to-flow model, called Ethereum because of its centralization and pre-scored origins.
Beincrypto reported that PlanB called Ethereum a “technocratic governance coin” rather than a decentralized hard assets.
“Primine is a big red flag, but I don’t think some people care,” Planb said.
Meanwhile, internal developer tensions amplify these concerns. Recent debates over the Ethereum roadmap and the philosophy of L2 design highlight ongoing governance tensions. To sum it up, these cloud stories are even cloudy.
In contrast, rival chains like Solana (SOL) and the BNB chain are moving forward with a unified narrative. Speed, cost-effectiveness, and developer experience cast a shadow over Ethereum.
As long as Ethereum lacks a clear economic identity, there is a risk that it will lose its connection with its competitors with a simpler, more cohesive message.
You may need to design a narrative to maintain market dominance and intellectual leadership in Web3. It could be a way to integrate programmaticity, security, and decentralization without tilting too hard to the flawed comparisons and revenue illusions.
“ETH must be its own asset with its own story and no one knows exactly what it is yet,” Rynes said.
Ethereum (ETH) price performance. Source: Beincrypto
Can Ethereum resolve its identity crisis before the market moves to a simpler, faster or more ideologically unified chain?
The answer may determine whether ETH remains Crypto’s second largest Altcoin, depending on the example of market capitalization or fractured innovation.
