Does Ethereum still have a future? Reflections on Kain's tweets!

Kain, the founder of Synthetix, @kaiynne, tweeted about the dilemmas facing Ethereum:

After reading the entire thread, I feel it revolves around a key question:

Can Ethereum's value capture mechanism as L1 still support the long-term value of ETH?

Kain's main point is actually a common concern:

1) Ethereum (L1) is being marginalized because:

• L2 has lower costs and higher efficiency;

The rapid development of L2 has led to reduced value capture for the mainnet, increased competition, and poor price performance, which could "siphon off" both traffic and fees.

• ETH's "profits" (burning) are decreasing, and the price is losing support.

2) There is a significant gap in community narratives:

From a dream of a $10 trillion market cap to ETH/BTC continuously hitting new lows. Naturally, ETH's "shareholders" are unhappy.

Kain believes the core issue lies in insufficient demand for L1 block space and compressed profit margins. "Tokenizing everything" is the only hope, as it can create new demand for block space. The community needs to refocus on solving the issues of value capture and insufficient block space, rather than continuing to disperse in pursuit of distant ideals.

I partially agree with this viewpoint—

1️⃣ The impact of L2 on Ethereum—

This is a well-trodden issue, and I agree with the point that L2 consuming L1's value capture is a very real problem.

Many in the industry are actually avoiding this: the prosperity of L2 does not equate to an increase in ETH's value.

Especially after the Dencun upgrade, L2 costs have plummeted, and ETH burning has also decreased. Liquidity, trading enthusiasm, and wealth effects are migrating towards L2 and other chains (like Solana).

If this trend continues, Ethereum's position as a "value pillar" will indeed be further weakened.

As one of the strongest assets driven by crypto narratives,

Three years ago, almost 100% of people believed ETH could reach $5-10 trillion. Now, this performance and outcome have indeed left many feeling "cut" or confused, creating a short-term vicious cycle.

2️⃣ Is tokenization the remedy?

"Tokenize Everything."

Kain @kaiynne mentioned that tokenizing everything through RWA, on-chain financial assets, compliant assets, etc., could re-elevate the demand for Ethereum's block space and bring ETH back to the core of value. Can it truly restore Ethereum's profit margins?

I feel there is a paradox here; this is essentially a chicken-and-egg problem:

• Tokenized assets mostly require regulatory and compliance support.

• Real-world assets (like RWA, bonds, stocks) may prioritize specialized chains or private chains rather than Ethereum.

• Even if deployed on Ethereum, they may prefer L2 over the more expensive L1.

Therefore, placing all hope on "tokenization" seems unreliable to me.

3️⃣ Personal judgment:

My personal judgment is:

1) In the short term, Ethereum is indeed on a downward trend, especially in terms of narrative, price, and enthusiasm; we are currently in a trough.

2) However, in the medium to long term, it still has strong ecological inertia, systemic advantages, and narrative potential. As long as it can solve the value return mechanism, it still has a chance for a comeback.

L2 is not the enemy; it is an extension. But if the mainnet loses its economic anchoring ability, ETH will become a powerless "base asset." What Ethereum should do is coordinate mechanism adjustments for L1/L2 revenue distribution, turning new narratives (like Restaking, RWA) into real applications, and avoid the internal competition imbalance that leads to internal friction.

The Ethereum community has solved many coordination challenges in the past.

Now it is time to prove itself again.

One sentence from Kain's tweet left a deep impression on me:

"I may be a fool, but I know Ethereum is facing real problems."

Indeed, now is not the time for self-congratulation; it is time to rethink Ethereum's value model.

Tokenization is just a direction, not a panacea.

No one can guarantee which chain will dominate the future, but it is certain that:

If ETH wants to return to its peak, it must resolve the contradiction of "L2 prosperity and mainnet blood loss" and find a new narrative that makes people believe it can reach $10 trillion.

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