Ethereum is dead.

For many venture capitalists, Ethereum has ceased to be a relevant investment asset. Layer-2 solutions, poorly managed inflation, loss of revenue…

"Ethereum is dead." A harsh statement, yet one that several venture capitalists appear to be making. As Layer-2 solutions blossom and the main chain struggles with inflation, a core asset is being lost sight of.

In a recent post, Quinn Thompson, founder of Lekker Capital, bluntly stated, "I think Ethereum is dead as an investment." He criticizes the lack of crypto user growth, chain activity decline, and revenue drops, ultimately leading to ETH losing its status as a safe haven asset.

This assertion stems from a broader observation: while Arbitrum, Optimism, and other Layer-2 solutions are booming, transferring a large part of the transactional activity, the main chain is capturing minimal value. As Nic Carter from Castle Island Ventures points out, "L2 siphons value from Layer-1, which has committed suicide."

This leaves the original Ethereum in a bleak state, especially considering EIP-1559, which was meant to make Ethereum deflationary, is no longer delivering, and the recent Dencun update has even brought back net issuance. Is the narrative of "ultrasound money" over?

It seems so, further complicating the thesis of an ETH designed to preserve value over time.

But in response to this disaffection, the Ethereum Foundation is moving. As Vitalik Buterin proposes a roadmap focused on securing and finalizing L2, the aim is to increase the network's interoperability, attract crypto developers again, and regain weight in the overall infrastructure.

However, will it be enough to reignite the interest of crypto investors? As long as the main chain does not better capture value and the economic model remains unclear, ETH risks remaining in the shadow of its own ecosystem.

A driving force of Web3 innovation with $850 billion in stablecoin volume, Ethereum's positioning as an investment asset is now questionable. Between value dilution and poorly managed inflation, it needs to revisit its fundamentals.

Without rapid evolution, it risks becoming a mere infrastructure tool, an ironic fate for a cryptocurrency that was initially meant to revolutionize the financial system.