2025 Ethereum Trends: The more successful the protocol, the higher the ecological risks? In-depth analysis of the post-Pectra era.

Column: Block Rabbit Observatory

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The Ethereum core protocol is becoming increasingly robust, yet the ecosystem faces unprecedented complexity.

In the past year, Ethereum has staged a textbook-level engineering miracle. From the Dencun upgrade that fundamentally addresses the L2 cost issue, to the Pectra upgrade aimed at optimizing the core staking economy, this "digital leviathan" of the digital world has precisely executed its public roadmap. However, a peculiar paradox lies before all observers: the certainty and success of the protocol layer seem to have not brought tranquility to the ecosystem layer, but instead have given rise to unprecedented complexity and potential risks. The engine room of Ethereum (the main protocol) has never been so strong and clear, yet its vast new continent (L2 and Restaking ecosystem) is filled with the clamor of opportunities and the fog of confusion. We must pose a new question: when the war of the underlying protocols is basically over, where will Ethereum's next battlefield be?

The duet of Dencun and Pectra

To understand the current state of Ethereum, one must first acknowledge the tremendous success of its core engineering.

This victory consists of two key upgrades:

Firstly, it is the economic transformation triggered by the Dencun upgrade at the beginning of 2024. By introducing Proto-Danksharding (EIP-4844), the Ethereum mainnet has opened dedicated, low-cost data channels (Blobs) for Layer 2 networks. This is not a minor patch, but a fundamental cost revolution. Over the past year and a half, we have witnessed a sharp decline in L2 transaction fees, which have remained at extremely low levels for a long time. The market has made the most honest votes with capital: in recent months, although the price of ETH has remained stable, its performance has lagged far behind the leading L2 ecological tokens. This clearly indicates that the expectation of value growth has successfully shifted from the execution capability of the mainnet to the flourishing L2 applications driven by low-cost data. Ethereum has successfully transformed itself from a "congested world computer" to the "secure settlement and data anchor" of the entire ecosystem.

Secondly, it is the governance evolution brought by the Pectra upgrade completed in May of this year.

If Dencun addresses the "cost" issue, then Pectra directly confronts the challenge of "control." In the face of the trend of power centralization among validators under the PoS mechanism, Pectra has reduced the operational advantages of large staking pools by improving the upper limit of validators' effective balance (EIP-7251) and optimizing the participation experience of decentralized staking. This is a precise, surgical intervention aimed at alleviating centralization pressure from the protocol level. Although a single upgrade cannot eradicate all problems, it sends a strong signal to the entire community: Ethereum core developers have the capability and willingness to defend the decentralized characteristics of the network.

The successful delivery of these two upgrades means that the main contradictions at the protocol level of Ethereum have basically been resolved. The engine room is functioning well, providing an unprecedented foundation of certainty for the expansion of the upper structure.

Systemic risks of Restaking and fragmentation of L2

However, the success of the engine room has pushed complexity towards a broader ecological layer, giving rise to two major mists:

First, there is the maturity of the Restaking track and its inherent systemic risks. The Restaking protocols represented by EigenLayer have evolved from an emerging concept into a vast and complex financial Lego over the past year. By sharing Ethereum's economic security, it provides a foundational launchpad for numerous emerging protocols (such as DA layers, oracles, bridges), which is undoubtedly a significant innovation. However, its essence lies in adding new leverage and risk layers that are not directly constrained by the main protocol, on the credit foundation of Ethereum. A failure of a Restaking service could trigger the confiscation of ETH principal, leading to a series of chain liquidations. This "potential systemic risk" has become a core issue that analysts cannot bypass when assessing the long-term stability of Ethereum.

Secondly, there are the side effects brought about by the prosperity of the L2 ecosystem: severe fragmentation. Dozens of Rollups networks operate independently, creating isolated liquidity islands and gaps in user experience. The transfer of users' assets between different L2s is not only cumbersome but also faces security risks brought by various cross-chain bridges. This escalating "L2 war" has spurred innovation while greatly harming the overall effect of the network. A digital nation that should have been unified has, in reality, splintered into countless city-states with different languages and incompatible transportation systems.

The commonality between these two major issues is that they cannot be solved merely by the next upgrade of the Ethereum main protocol. The battlefield has shifted.

Image description: Layer 2 Total Locked Value (TVL) Market Share Pie Chart

Data source: defillama

Positive Gardener: How EcoDev Bridges Ecological Gaps

In the face of ecological chaos that cannot be directly intervened by the protocol layer, the Ethereum Foundation's response strategy demonstrates a mature governance that transcends purely technical thinking. Its Ecosystem Development Plan (EcoDev) plays the role of a "proactive gardener," using "soft power" to bridge the cracks in the ecosystem.

By sorting out its recent funding strategy, we can find that EcoDev's investment is highly targeted. It does not simply reward the most successful projects but heavily allocates resources to areas that can enhance the "public goods" of the entire ecosystem:

Funding Standardization Tools: Support the development of universal L2 cross-chain communication standards and developer toolkits to reduce the negative impact of fragmentation.

Support academic research: Provide long-term funding for cutting-edge fields such as ZK technology and MEV mitigation solutions to ensure technological reserves.

Cultivating a Global Community: Invest resources in emerging markets such as Asia, Africa, and Latin America to ensure that the culture and developer base of Ethereum remains global and diverse.

The core idea of this strategy is: since it is impossible to enforce unification through protocol rules, we can guide the ecosystem towards integration by cultivating public infrastructure and common standards. This is a softer and more long-term governance philosophy.

The evolution from protocol engineer to ecological gardener

The future path of Ethereum is now clear. It has successfully modernized its core protocol, establishing a robust and efficient underlying system. Now, its focus is shifting from being a "protocol engineer" to a more decentralized "ecosystem gardener."

This is a dual-track parallel Long March: at the protocol layer, continuous fine-tuning and security reinforcement are underway; at the ecological layer, strategic investments and cultivation are made to address new challenges arising from success. What we see is no longer just a development team focused solely on technical implementation, but a mature organization that understands how to govern a large, complex, and vibrant digital economy.

This ability to navigate complexity, face new challenges calmly, and respond with diverse approaches is precisely what makes Ethereum the most trustworthy asset.