Ethereum, a ten-year narrative metamorphosis

Authors: Ada, David, Deep Tide TechFlow

On July 30, 2015, at 3:26 PM, the first block of Ethereum was successfully mined.

With the moment known as "Frontier", an ambitious prophecy was born - the "World Computer". Vitalik and the early developers believed that what they were building was not an upgrade to Bitcoin, but a global computing platform capable of running any decentralized application.

Today, ten years later, marks the tenth anniversary of the Ethereum mainnet.

When we examine the development trajectory of Ethereum, we find that this "world computer" has not operated various decentralized applications as expected; instead, it has evolved into a settlement layer dominated by financial applications.

DeFi protocols account for the vast majority of Gas consumption, with trillions of dollars in assets flowing through this network, while the once-promising decentralized applications such as social networking, gaming, and storage have either vanished or migrated to other chains.

Is this shift in narrative a compromise or an evolution?

Looking back at this point, the narrative changes of Ethereum over the past decade are not just a story about Ethereum, but also a story about how technological ideals seek a foothold in the real world.

The World Computer, the Golden Age of Idealism (2015-2017)

To understand the narrative origins of Ethereum, we must go back to that winter at the end of 2013.

At the age of 19, Vitalik Buterin had a bold idea while traveling in Israel: what if blockchain could not only transfer money but also run any complex programs?

The revolutionary aspect of this idea is that it expands blockchain from a dedicated value transfer tool to a general-purpose computing platform for the first time.

But behind this initial vision lies a deeper cultural motivation.

The early Ethereum community was made up of a group of technological idealists who believed in "code is law." They were not just building a new technological platform, but were attempting to create a new social paradigm—a digital utopia that operates entirely on code, without the need for centralized authority.

The narrative at that time was about "decentralization," in the "world computer" where code is law.

This is not just a technical ideal, but has also become a political declaration and philosophical stance. Early supporters of Ethereum believed that through smart contracts, they could restructure the operational rules of society and create a fairer, more transparent, and trustless world.

This idealism of technology is evident everywhere in the early design of Ethereum. The Turing-complete virtual machine, the Gas mechanism, the account model—each technical choice reflects the value orientation of "maximizing decentralization" and "maximizing universality."

On April 30, 2016, less than a year after the Ethereum mainnet went live, The DAO (Decentralized Autonomous Organization) officially launched its crowdfunding.

This project perfectly embodies the idealistic spirit of the early Ethereum community: no management, no board of directors, and an investment fund completely controlled by code. In just 28 days, The DAO raised 11.5 million ETH, accounting for 14% of the total ETH supply at that time, worth over $150 million.

However, the ideal soon faced the brutal test of reality. On June 17, an attacker exploited a recursive call vulnerability in The DAO smart contract to steal 3.6 million ETH.

The subsequent debate tore the entire community apart. One side argued that since code is law, the ETH obtained through exploiting code vulnerabilities is "legal," and any human intervention goes against the core spirit of blockchain. The other side contended that when the outcome clearly contradicts the community's collective will, it is necessary to correct the mistake through a hard fork.

Ultimately, the majority led by Vitalik chose a hard fork to return the stolen ETH to the original holders. This decision resulted in the first major split of Ethereum, with the minority adhering to the principle of "Code is Law" continuing to maintain the original chain, which is today's Ethereum Classic (ETC).

This crisis reveals the inherent contradictions of technological idealism: complete decentralization may lead to unacceptable consequences, while any form of human intervention may be viewed as a betrayal of the principle of decentralization.

This contradiction runs through the entire development process of Ethereum and lays the groundwork for the shift in narrative that follows.

ICO Token Machine, Lost in the Bubble (2017-2020)

At the end of 2016, no one could foresee how the upcoming ICO frenzy would change everything about Ethereum.

In the summer of 2017, the cryptocurrency world experienced an unprecedented capital frenzy. The simple concept of ICO (Initial Coin Offering) - raising funds by issuing tokens - ignited the imagination of global speculators. In 2017 alone, the funds raised through ICOs exceeded $6 billion, and by the first half of 2018, this figure skyrocketed to $12 billion.

Ethereum, on the other hand, is the token machine that hosts numerous ICOs.

Write contracts, design payment rules, come up with token names and quantities, one by one the tokens that do not require real commitments make their grand appearance:

A seemingly grand white paper, a story that can trigger FOMO (fear of missing out), and a seemingly reasonable token economic model.

At that time, Ethereum was facing an unexpected identity crisis --- originally designed as a "world computer," it suddenly found that its biggest use was actually for issuing tokens.

The huge gap between this reality and vision constitutes the first major fracture in the Ethereum narrative.

Vitalik and the early core developers envisioned a global computing platform for running decentralized applications, but the market's answer was: we only need a simple ERC-20 standard to issue tokens.

This simplification is not only at the technical level but also at the cognitive level. In the eyes of investors, Ethereum is no longer a revolutionary computational paradigm, but a money-printing machine.

The deeper issue is that the label of "token issuance platform" begins to shape the development direction of Ethereum in reverse. When 90% of the activity in the ecosystem is token-related, development priorities inevitably lean in that direction. Discussions about token standards in EIPs (Ethereum Improvement Proposals) far exceed those about other application scenarios, and developer tools primarily revolve around token issuance and trading, leading the entire ecosystem into a state of "path dependence."

If the previous The DAO incident was a philosophical debate within idealism, then the ICO boom was the first direct collision between idealism and market reality. This collision revealed a fundamental contradiction in the Ethereum narrative: the huge gap between technological vision and market demand.

The subsequent bear market in 2018.

For Ethereum, this is not only a collapse in price but also a collapse in narrative. When the ICO bubble burst and the slogan of "blockchain revolution" is no longer believed by anyone, Ethereum must answer a fundamental question:

If you are not the world computer, then what exactly are you?

The answer to this question gradually emerges during the trials of the bear market. A new narrative is taking shape: Ethereum is first a financial settlement layer, and then it may become a general-purpose computing platform.

The transformation is also reflected in the technology roadmap. The design of Ethereum 2.0 increasingly considers the needs of financial applications – faster finality, lower transaction costs, and higher security. Although the official discourse still emphasizes "generality," the actual optimization direction has clearly pointed towards financial use cases.

The correctness of this choice will be verified in the next phase.

DeFi Great Victory, when finance becomes Ethereum's duty (2020-2021)

The DeFi Summer of 2020 was not just an explosion at the application layer for Ethereum, but also a complete transformation of identity recognition.

If the ICO in 2017 unexpectedly turned Ethereum into a token issuance platform, then the success of DeFi has made the entire ecosystem realize that finance may not be a compromise choice for Ethereum, but rather its natural mission.

This change in understanding is gradual.

Initially, DeFi was regarded as one of many experiments, alongside applications like gaming, social networking, and supply chain. However, when Compound's liquidity mining ignited market enthusiasm, when hundreds of billions of dollars flowed into various DeFi protocols, and when Gas fees reached new highs due to DeFi activities, an undeniable fact emerged: Ethereum found its Product-Market Fit.

In the past, positioning Ethereum as a financial platform seemed like a "downgrade," a betrayal of the grand vision of a "world computer." However, DeFi has shown another possibility: finance itself is the most complex and valuable form of computation.

Every transaction, every settlement, and every derivative involves a complex calculation process. From this perspective, becoming the "world's financial computer" is not contradictory to becoming the "world computer"; rather, they are different expressions of the same vision.

The explosion of DeFi has created a powerful positive feedback loop, continually reinforcing the narrative of Ethereum as financial infrastructure. The surge in usage, the gathering of developers, and the gradual shift in discourse power have led to an increasingly louder voice from DeFi project teams.

However, the success of DeFi has also brought a severe reality problem: the performance bottleneck of Ethereum.

When a simple token swap requires paying dozens or even hundreds of dollars in Gas fees, Ethereum faces a survival crisis. This is no longer an ideal question of "how to become the world computer," but rather a real issue of "how to keep DeFi running."

This urgency has fundamentally changed Ethereum's technical priorities. In the past, scalability was seen as a long-term goal, where the most elegant solutions could be researched slowly. However, the explosion of DeFi has made scalability an urgent issue. The Ethereum community had to accept a reality:

A perfect solution can wait, but the market will not wait.

Thus, we see a series of pragmatic choices. Layer 2 is no longer a distant concept but an urgent solution that must be deployed immediately. Although the Rollup technology is not sufficiently decentralized, it can quickly alleviate congestion and has therefore received full support from core developers. The roadmap for Ethereum 2.0 has also been readjusted to prioritize the features that are most beneficial for DeFi.

The adjustment of this technical route is essentially a concrete manifestation of a narrative shift. Once Ethereum accepted its positioning as a financial infrastructure, all technological decisions revolved around this core.

The Rise of L2, Sovereignty Transfer and the Parasite (2021-2023)

Ethereum in 2021 is facing a harsh reality: the success of DeFi is killing Ethereum.

When a simple transaction has to wait for several minutes, and ordinary users are squeezed out by high costs, the narrative of Ethereum faces a new crisis. The positioning of "global financial settlement layer" sounds great, but if only the wealthy can afford it, can this narrative still hold?

The deeper contradiction lies in the fact that Ethereum's success has exposed the fundamental flaws in its architecture. As a monolithic blockchain, Ethereum attempts to handle all tasks at the same layer: executing computations, validating transactions, storing data, and reaching consensus. This "all-in-one" design was an advantage in the early days, but has become a fatal weakness during the scaling phase.

In the face of this dilemma, the Ethereum community has undergone a painful cognitive shift. A true world computer should be a modular, layered system like the Internet.

This transformation was articulated most clearly in an article by Vitalik: "The future of Ethereum is modular."

This sentence marks another significant turning point in the Ethereum narrative. From "one chain to rule them all" to "a multi-layer collaborative ecosystem," Ethereum is beginning to accept a reality — a single blockchain cannot meet all needs, and the future belongs to specialized divisions of labor.

As Rollup solutions like Arbitrum and Optimism begin to handle an increasing number of transactions, fundamental questions arise. If most activities occur on Layer 2, then what is the Ethereum mainnet?

In 2022, this issue showed more pronounced tension in data availability. As projects like Celestia proposed dedicated data availability layers, the struggle over data availability (DA) unfolded, balancing between Ethereum's openness and control.

Ethereum has always touted openness and decentralization, but when this openness threatens its own position, the community's response becomes complex. Some people have begun to use the concept of "Ethereum Alignment" to attempt to maintain some form of control while being open.

Interestingly, this argument has changed the definition of success.

In the past, success meant that all activities were conducted on Ethereum. Now, success is redefined as: even if activities take place elsewhere, as long as they ultimately require the security of Ethereum, it is a victory for the Ethereum ecosystem. This change in definition reflects the shift in thinking of Ethereum from "exclusivity" to "symbiosis."

Hundred Chain Battle and the Defense of "Legitimacy" Narrative (2023-2024)

In 2023, a subtle yet significant change occurred in the blockchain world: the new generation of public chains is no longer trying to become "better Ethereum," but instead began to tell a completely different story.

Solana no longer emphasizes itself as "the faster smart contract platform", but positions itself as "the Nasdaq of blockchain". Aptos and Sui do not talk about "decentralization", but instead emphasize "Web2-level user experience".

For Ethereum, this change is both a liberation and a challenge. The liberation lies in no longer being caught in an arms race of performance parameters; the challenge is that when competitors open up new fronts, Ethereum's traditional advantages may become irrelevant.

The deeper question is: When "decentralization" is no longer the only value standard, how much appeal does the core value that Ethereum prides itself on still have?

The complexity of this narrative competition is most evident in Solana's resurgence.

After the collapse of FTX in 2022, everyone thought Solana was finished. But in 2023, it made a strong comeback with Meme coins and low-cost trading. This phenomenon reveals an unsettling truth for the Ethereum community --- the market may not care about decentralization as much as they think.

In response to the rise of new public chains, the first reaction of the Ethereum community is to emphasize "orthodoxy".

Supporters of Ethereum point out the centralization issues, security risks, and technological compromises of these chains. However, the market's reaction is unexpectedly tepid. When users can complete transactions at a cost of just a few cents, they seem unconcerned about whether the network is "decentralized enough."

When Ethereum tries to explain its value in pragmatic terms, it loses its original moral high ground. "We are safer" sounds far less compelling than "We are building a decentralized future." This secularization of the narrative may attract more mainstream users, but it could also alienate core supporters.

More complicating matters, new public chains are beginning to redefine "decentralization".

They believe that true decentralization should allow ordinary people to participate, rather than just an elite network that only the wealthy can afford. When Solana users criticize Ethereum's high gas fees, Ethereum falls into the moral trap it has set for itself.

By early 2024, a disturbing trend became apparent, namely that the narrative around Ethereum was becoming increasingly defensive. Most discussions are no longer about "what we are going to build," but rather "why we are better than other chains." This shift from offense to defense reveals the innovation dilemma that Ethereum is facing.

This defensive posture is expressed in multiple ways.

The technical roadmap is increasingly responding to competitive pressures rather than an intrinsic vision, and community discussions are filled with criticisms of other chains rather than self-reflection. Even Vitalik's articles are increasingly explaining and defending, rather than proposing bold new ideas like in the early days.

More seriously, this defensive mentality has started to affect the innovative vitality of the ecosystem. Developers no longer ask "what is possible," but rather "what is safe." Investors are no longer looking for breakthrough innovations, but instead seeking "the killer of the Ethereum killer." The entire ecosystem has fallen into a state of internal competition, busy with internal rivalries rather than external expansion.

The root of this situation lies in the exhaustion of narratives. When the "world computer" proves to be too grand, the "DeFi settlement layer" is too narrow, and the "modular blockchain" is too technical, Ethereum lacks a new narrative that can inspire imagination.

Narrative Reconstruction and the Future (2024-)

In 2024, as the crypto market seeks new growth drivers once again, RWA (Real World Assets) has become the new savior. For Ethereum, this is not just a new application scenario, but also an opportunity for narrative reconstruction. From "changing finance" to "connecting reality," Ethereum attempts to tell a story that is more pragmatic and closer to the mainstream world.

The narrative of RWA in Ethereum is attractive due to its specificity.

It is no longer an abstract "decentralized finance" but rather "turning your US Treasury bonds into tradable tokens." No longer is it about "permissionless innovation" but rather "reducing the friction costs of cross-border trade." This shift from idealism to pragmatism reflects the Ethereum community's new understanding of market demands.

More subtle is that the RWA narrative has changed the definition of success. In the past, success meant creating a brand new, native crypto economy. Now, success has turned into serving the existing financial system.

Old money from Wall Street is rushing to invest in ETH ETFs, while the co-founder of Ethereum jumps into the US stock market to acquire shell companies... Assets are breaking out, and the correlation between coins and stocks is increasing. Ethereum is also gradually returning to $4000 in the new market cycle.

The way of playing has changed, and so has the narrative.

In the past, the community was always looking for "the" grand narrative that could define Ethereum; now, more and more people are beginning to accept a reality: perhaps there is no single answer at all.

People no longer pursue a unified, all-encompassing narrative, but allow multiple narratives to coexist. For DeFi users, Ethereum is financial infrastructure; for enterprises, it is a tool for crypto transformation; for creators, it is a copyright protection platform; for idealists, it remains a decentralized future.

To meet the broader demand for Ethereum services and attract a more diverse user base.

We just don’t know whether this diversification is a sign of maturity or a symptom of being lost. A healthy ecosystem should indeed embrace diversity, but a platform lacking a core vision may lose its drive to move forward.

However, the marginal effect of technological innovation is diminishing, while narrative innovation must continue.

When technology is decoupled from narrative, it is better to solve real problems rather than invent new vocabulary. Instead of promising to change the world, it is better to first improve user experience. This pragmatic attitude, although not very exciting, may be more sustainable.

In the spring breeze of peach and plum, a cup of wine; in the rivers and lakes, under the night rain, ten years of lanterns.

From idealism to realism, from revolution to reform, from subversion to integration. Ethereum's decade may not necessarily be a betrayal of its original intent, but rather the cost of growth. After all, when the old story comes to an end, the new story can begin.

Perhaps what will truly bring Ethereum to billions of users is not just what it can do, but what the real world chooses to do with it.

From vision to reality, from commitment to delivery, this may be the ultimate direction of the evolution of the Ethereum narrative. The gains and losses, advances and retreats, persistence and compromises in this process will define not only Ethereum but also the future of the entire cryptocurrency industry.