灰度：以太坊 Dencun 升级和 ETH 2.0 时代

Amid the spotlight on Bitcoin due to the approval of a U.S. spot Bitcoin ETF and the imminent halving in April, attention is about to shift to Ethereum. With the Securities and Exchange Commission's (SEC) decision deadline for a spot Ethereum ETF looming in May 2024, the second-largest crypto asset by market cap could soon take center stage.

The Ethereum network's pivotal Dencun upgrade is scheduled for March 13, 2024, marking a significant stride in enabling Ethereum to compete with faster chains like Solana in the realm of smart contract platform scalability. This transformative move aims to address Ethereum's long-standing scalability challenges, potentially propelling it into a new era of efficiency and user-friendliness.

Grayscale ReSearch identifies several tailwinds favoring ETH, including:

Impending upgrades

Net deflationary supply

Network revenue generation ($2 billion in 2023)

The SEC's May ruling on a spot Ethereum ETF

Increasing use cases for renting Ethereum's security features

Bitcoin birthed the crypto industry in 2009, introducing the concept of a public blockchain. In 2015, Ethereum revolutionized this notion by applying it to smart contracts, effectively creating an entirely new category within the crypto asset class, distinct from Bitcoin in its use cases—smart contract platform cryptos. Analogous to a decentralized version of the Apple App Store, Ethereum provides a foundational platform for a diverse array of applications, known as decentralized apps or "dApps." These dApps span gaming, identity protocols, digital art, and tokenization of stablecoins and financial assets.

Today, Ethereum reigns supreme among smart contract platforms in terms of market capitalization and numerous fundamental metrics. However, it faces intensifying competition. Despite posting a +90% gain in 2023, Ethereum lagged behind the broader smart contract platform sector (+110%) and some key rivals, such as Solana (+916%) and AVAX (+255%). Grayscale Research views this as indicative of Ethereum's passage through a well-known "adolescent phase," where it stands on the cusp of "growing up" through crucial transformations aimed at tackling its scalability hurdles. Recent price performance, with Ethereum outperforming the wider smart contract platform industry year-to-date (+26% vs. +3%), seemingly reflects market anticipation of the impending Dencun upgrade.

Figure 1: Ethereum dominates in fees and locked total value (TVL), but lags in transaction volume

Source: Artemis and Dapp Radar, data as of February 1, 2024. Daily address and transaction data represent averages since January 2024.

Ethereum benefits from its first-mover advantage, leading across most fundamental metrics compared to all other smart contract platform cryptocurrencies.

Ethereum enjoys pronounced network effects. As depicted in Figure 1, it leads in developer count (306 per week) and total app count (4,400 dApps), fostering a robust environment for application interoperability and innovation. With a dominant $45.9 billion TVL—more than five TIMes that of its closest competitor—Ethereum boasts unparalleled Liquidity, making it particularly attractive to new financial applications and developers.

Ethereum is also one of the few crypto assets capable of generating value accretion. Designed with high fees, Ethereum generated over $2 billion in network revenue in 2023. By comparison, Solana generated just $1.2 billion during the same period (Figure 1). Ethereum's network revenue comprises tips, which serve as rewards for stakeholders contributing to network security, and base fees, which are burned, effectively reducing the network's supply (and potential selling pressure). Since the "Merge" in late 2022, ETH supply has remained in a net deflationary state (Figure 2). This fee-driven flywheel not only drives ETH value but also incentivizes heightened levels of network security, solidifying Ethereum's position as the safest[6] and most trusted smart contract platform, as well as the largest by market cap.

Figure 2: Post-"Merge," Ethereum supply is net deflationary; ETH appreciates

Ethereum's revenue, security, liquidity, and network effects collectively underpin its unique positioning within the industry.

This begs the question: If Ethereum excels in so many different metrics, why did its price performance trail competitors in 2023?

In Grayscale Research's view, much of this disparity can be attributed to Ethereum's ongoing "adolescence." Presently, Ethereum's performance is hampered by slow transaction speeds, low throughput, and high user costs. As of February 22, Ethereum's average transaction fee stood at $2.3, significantly more expensive than alternatives like Solana. This might drive end-users toward other chains (refer to Figure 3 below). Nevertheless, the Ethereum commUnity has a plan. Core developers are working towards "Ethereum 2.0," a series of upgrades designed to address these user cost and scalability issues. With each upgrade, Ethereum effectively "grows up," steadily narrowing the gap in throughput and costs.

Figure 3: Ethereum and Solana offer fundamentally different models with contrasting trade-offs, both constantly evolving

Source: Artemis, Messari. Daily transaction volume represents averages for January 2024. Market cap and transaction cost data as of February 20, 2024.

Now that we've explored Ethereum's competitive landscape, it's worth delving into its future vision.

Ethereum aspires to be the safest and most scalable settlement layer for the dApps built atop it. The "Ethereum 2.0" roadmap outlines a plan to tackle scalability challenges by dividing the network into specialized segments responsible for tasks like processing transactions, storing transaction data, or ensuring all transactions are valid. This "modular" approach allows targeted innovation and updates within specific areas of the Ethereum network without compromising its overall security, enabling it to solve scalability issues while maintaining network security.

This decision to "break down" the network into specialized parts has spawned a host of independent projects, including Layer 2 scaling solutions like Optimism (OP) and Arbitrum (ARB), and data availability solutions like Celestia (to be discussed further). These standalone products foster greater competition and innovation, potentially solving the scalability conundrum and enhancing the broader Ethereum ecosystem. Ethereum's "modular" model contrasts with the "integrated" model employed by competitors like Solana, which consolidates all aspects of network operations (transaction processing, data storage, and consensus mechanism) into a Streamlined "Layer 1."

In the multi-step Ethereum 2.0 roadmap, Ethereum has already made a technical leap forward by transitioning to "proof-of-stake" via its "Merge" upgrade in September 2022. It witnessed early signs of Layer 2 scaling success in 2023. The next milestone on the roadmap is the Dencun upgrade (also known as EIP-4844), which will make Ethereum Layer 2 transactions cheaper and bring the network closer to its ultimate goal.

The introduction of Layer 2s represents a substantial step forward in enhancing Ethereum's scalability. Ethereum's shift towards a "modular" model separates transaction execution from transaction settlement, allowing activity to occur "off-chain" or on Layer 2s built atop the Ethereum mainnet. These Layer 2s process transactions, batch them together, and then send a compressed version back to the Ethereum mainnet for settlement (see the intuitive representation in Figure 4).

Figure 4: Ethereum Architecture Diagram

Based on Delphi Digital graphics. For illustrative purposes only

Initial progress is encouraging. Today, Ethereum Layer 2s attract liquidity comparable to that of Ethereum's largest Layer 1 competitors. As of February 20, 2024, Arbitrum alone leads most Layer 1s, including Solana, Avalanche, and Polygon, with a $3 billion TVL (Figure 1). Furthermore, Layer 2s have facilitated the entry of new users into the Ethereum ecosystem. As shown in Figure 5, while daily user counts on the Ethereum mainnet remained steady in 2023, daily user counts on Ethereum Layer 2s, such as zkSync, Arbitrum, Optimism, and Coinbase's BASE, continued to grow.

We believe the sustained appeal of Ethereum Layer 2s may prove a tailwind.