Ethereum Faces Challenges As Solana Rises: Community Divided

Ethereum, once the leading blockchain for smart contracts, is now grappling with significant challenges as it faces fierce competition from Solana. The Ethereum community is experiencing internal strife, with calls for leadership changes and a growing sense of disillusionment among developers and investors alike.

Key Takeaways

• Ethereum's total value locked (TVL) has plummeted from $107 billion in late 2021 to around $64.5 billion as of January 2025.

• Solana has surged ahead, processing up to 65 million transactions daily compared to Ethereum's 1-1.2 million.

• Internal discord within the Ethereum Foundation (EF) has led to calls for restructuring and leadership changes.

• Vitalik Buterin, Ethereum's co-founder, is facing criticism for his handling of the EF and its direction.

Ethereum's Declining Metrics

Ethereum's journey has shifted from a promising ascent to a troubling decline. Once celebrated for its pioneering role in smart contracts, Ethereum's total value locked has seen a staggering drop. In November 2021, it reached an all-time high of $107 billion, but by early 2025, it had fallen to approximately $64.5 billion.

In contrast, Solana has made a remarkable comeback, increasing its TVL from $210 million in early 2023 to over $12 billion recently. This shift highlights the importance of scalability and user experience in the current blockchain landscape.

Internal Struggles Within The Ethereum Foundation

The Ethereum Foundation is facing an identity crisis, with internal discord and questions about its vision. Vitalik Buterin has proposed significant changes to the EF's leadership structure, aiming to improve communication and efficiency. However, this has sparked controversy, with critics arguing that his central role undermines Ethereum's decentralized ethos.

The EF's executive director, Aya Miyaguchi, has faced backlash over perceived inefficiencies, leading to a toxic environment that has driven some developers away. Buterin condemned the harassment directed at Miyaguchi, emphasizing the need for a supportive community.

The Emergence Of The Second Foundation

In December 2024, Konstantin Lomashuk, founder of the Lido protocol, introduced the concept of a "Second Foundation" to challenge the EF's leadership. This initiative aims to decentralize power within Ethereum and foster innovation. Lomashuk's vision includes implementing dual governance within Lido and addressing Ethereum's staking mechanism to prevent centralization.

Community Discontent And Calls For Change

The Ethereum community is increasingly vocal about its dissatisfaction with the current leadership. Prominent figures have criticized the EF for its lack of urgency and coherent strategy. Some community members have even threatened to reevaluate their investments in Ethereum if leadership does not change.

Critics argue that the EF's focus on ideological initiatives has detracted from practical innovation, leading to a growing divide between the foundation and its supporters. As Ethereum struggles to maintain its relevance, the pressure for decisive action is mounting.

Conclusion

Ethereum's future hangs in the balance as it navigates fierce competition from Solana and internal strife within its community. The need for effective leadership and a clear vision has never been more critical. If Ethereum fails to adapt and address these challenges, it risks losing its position as a leader in the blockchain space.

Sources

• Ethereum crumbles as Solana steals the show: What's next?, crypto.news.

• Ethereum, beset by infighting, sags behind other tokens in a bull market, Yahoo Finance.

• Vitalik claims sole authority over Ethereum Foundation leadership, Cointelegraph.

• The Protocol: Ethereum Foundation Fracas, CoinDesk.