Vitalk Buterin Says Ethereum Has “Crazy Strong” Fundamentals

Ethereum co-founder, Vitalik Buterin, has explained on X / Twitter why he believes the Ethereum ecosystem is “crazy strong” right now. 

In response to a question from an X / Twitter user who was airing his view that the Ethereum ecosystem had weakened considerably this market cycle, Buterin set the record straight, insisting Ethereum has grown stronger over this cycle.

Buterin highlighted the maturation of the ecosystem, focussing on layer-2s and noting the huge drop in transaction fees when using these networks. The Ethereum founder also emphasised the ecosystem’s usability improvements and technological advancements such as more powerful ZK tooling and progress on STARKs.

Related: Vitalik Buterin Predicts Imminent Breakthrough in Ethereum Layer-2 Interoperability Challenges

Ethereum Fundamentals Stronger Says Buterin

Buterin started his defence of the Ethereum ecosystem by pointing out transaction fees on layer 2 networks have fallen to about US$0.01 following the introduction of Blob data structures with the network’s Dencun upgrade back in March.

He also noted the following as signs of Ethereum’s viability:

• Two EVM layer-2s, Optimism and Arbitrum, are now at stage one of their development and that the user experience of cross-L2 wallets has improved considerably.
• The development of improved zero-knowledge (ZK) tooling, enhanced second-generation privacy tools and the emergence of more powerful identity and credential ecosystems.
• The development progress on STARKs (Scalable Transparent Argument of Knowledge) provides clarity on the network’s long-term security and decentralisation.

Buterin ended his reply by ramming home his belief in the strength of Ethereum, saying: 

The fundamentals for Ethereum are actually crazy strong right now.

Vitalik Buterin, Co-Founder of Ethereum

Strong Fundamental Not Reflected in Price Action

While Buterin is correct to point out that Ethereum likely has stronger fundamentals now than it has had in the past, that isn’t being reflected in the price action — to the endless frustration of degens everywhere.

The original questioner on X / Twitter, @Kritpo_Ozzy, was pointing out that Ethereum’s price action is weak, not so much its technical fundamentals:

And he isn’t wrong. According to data from CoinGecko, over the past month ETH is down around 30% relative to the US dollar, and since its all-time high of US$4,878 (AU$7,270) achieved in November 2021, it’s down 45.9%. 

Relative to Bitcoin the stats aren’t much better with ETH down 30% against BTC over the past month too, suggesting ETH really is showing some signs of weakness. Having said all that, the price of ETH is up around 60% against the US dollar in the past year, so it’s not all bad news.

Related: Solana Devs Address Critical Security Vulnerability with Latest Patch as Binance Labs Boosts Restaking

What could explain ETH’s relatively weak price action? Part of the explanation could be Solana. The ‘Ethereum Killer’ has seen strong growth this year, with memecoins — something that used to be mostly an ETH thing — driving a lot of that growth. Compared to ETH’s year-on-year price growth of 60%, SOL is looking very strong with an impressive 700% increase.

So while ETH’s fundamentals are getting stronger and stronger, its price action in the face of new challengers, like Solana, is starting to show some signs of weakness. Buterin seems confident though, that continuing to build and strengthen the ecosystem’s fundamentals during this relatively quiet phase in the market cycle will stand it in good stead for improved price action if, or when, the bull market ramps up.