- Members of the Ethereum community had differing views on the value and roadmap of ETH.
- Mixed signals from Ethereum executives could hurt ETH sentiment.
THE Ethereum (ETH) Ethereum’s leadership has been in the news following its long-term roadmap and the prospects of ETH increasing in value. One of the Ethereum community members, Justin Drake, suggested that ETH is like Nvidia and Apple and could attract multi-billion dollar valuations based on its fees.
Duck said,
“Ethereum is like a very large company like Nvidia, Apple… we can get multi-trillion dollar valuations just based on flows (fees). And then you know there’s a whole other issue on top of that trillion dollar base valuation for ETH to be money, collateral… for decentralized stablecoins.”
Mixed opinions on the value of ETH
However, some founders and creators of the Ethereum ecosystem disagree with these perceived leadership views. Sam Kazemian, founder of DeFi protocol Frax Finance, was one of the critics.
Kazemian believed that comparing ETH to Nvidia or Apple would limit the altcoin’s growth potential relative to Bitcoin. He claimed that this valuation would not be a win for the altcoin asset.
“ETH currently generates $1 billion in annual revenue. If we multiply that by 385 to match Apple’s, that means ETH would have to multiply by 11 to match Apple’s valuation. Does that sound like a winning roadmap for ETH to you?”
He believed that this was a wrong way for executives to assess the value of ETH and that it might not compete with BTC.
“Does Ethereum as a large company where its “base valuation” is measured by cash flow from fees give it a chance of catching up or surpassing BTC one day?”
He added:
“Apple has annual revenue of $385 billion, which is worth $3.3 trillion. Bitcoin has no annual revenue and will never have a single dollar of revenue. It is already worth $1.1 trillion.”
Kazemian, like most protocol founders, argued that ETH’s primary value should be based on its “store of value” (SoV) and DeFi ecosystem.
ETH management says…
Unlike BTC’s “digital gold” slogan, ETH has struggled to come up with a compelling, unified pitch deck for potential investors. Executives’ push for “programmable money” and “digital gold”digital oil” did not generate the expected interest.
Ethereum’s DeFi vision has also given rise to divergent views from executives. For example, Vitalik Buterin has been skeptical of pure DeFi as the sole catalyst for crypto growth.
This was in contrast to other community members like Kazemian and Uniswap’s Hayden Adams, who believed DeFi was essential to ETH’s value growth.
According to Coinbase analysts, this divergent Ethereum’s DeFi vision has made it difficult for new investors to understand the asset and damaged its market sentiment.
Additionally, ETH fees have denied significantly since Dencun’s upgrade in March, as low-cost blobs prompted users to migrate to L2s.
Source: Galaxy Research
This also has split The community is debating whether to change blob fees to help ETH L1 gain value relative to L2s as ETH inflation problem worsens after the Dencun upgrade.
The above-mentioned community issues have further shaken investor sentiment around ETH.
That said, ETH has been losing ground against BTC. This underperformance was illustrated by a yearly low in the ETH/BTC ratio, which tracks the altcoin’s price performance against BTC. ETH’s value has abandoned 44% against BTC over the last two years.
