Ethereum remains the cornerstone of decentralized innovation, powering over half of all decentralized applications (dApps) and hosting the largest Total Value Locked (TVL) in the blockchain ecosystem. As Layer 2 (L2) solutions and Ethereum 2.0 advancements reshape scalability, security, and user experience, key figures like Justin Drake from the Ethereum Foundation and Owen Zhang, Head of Web3 Products at OKX, offer invaluable insights into Ethereum’s evolution.
This deep dive explores Ethereum’s technical roadmap, decentralization efforts, DeFi expansion, and long-term viability—directly from two of its most influential contributors.
Ethereum After the Cancun Upgrade: Lower Fees, Higher Activity
The Cancun upgrade marked a pivotal moment for Ethereum’s scalability. By introducing proto-danksharding, the network significantly improved data availability for L2 rollups through blobs, reducing transaction costs and boosting throughput.
👉 Discover how Ethereum’s latest upgrades are reshaping Web3 scalability.
According to Justin Drake, post-upgrade data shows a clear trend:
- Blob usage has grown from 1 blob per block in March to 2.3 blobs per block today.
- The network is on track to reach the target of 3 blobs per block, which will stabilize blob fees at market equilibrium levels.
From an economic standpoint, increased data capacity shifts the supply curve rightward—lowering equilibrium prices (gas fees) and stimulating demand. While overall transaction volume hasn’t exploded, user activity on L2s has surged.
Owen Zhang highlights concrete metrics:
- Base: Daily Active Users (DAUs) up 560%, Daily Transaction Volume (DTXs) up 540%.
- Optimism: DTXs increased by 70%.
- Arbitrum: DTXs rose by 200%.
These gains reflect a growing preference for cost-efficient environments—especially among retail users and micro-transactors.
Decentralization in Action: The Ethereum Foundation’s Shrinking Role
A core principle of Ethereum is decentralization—not just technologically, but organizationally. The Ethereum Foundation (EF) has deliberately reduced its footprint to foster a more distributed ecosystem.
Justin Drake outlines EF’s current responsibilities:
- Hosting developer conferences like Devcon.
- Maintaining Geth, one of five execution clients.
- Funding community projects via unconditional grants.
- Coordinating core development calls (e.g., All Core Devs, MEV-Boost).
- Conducting foundational research.
- Supporting roadmap development led by Vitalik Buterin.
Crucially, EF now holds only 0.23% of total ETH supply, with a long-term vision of approaching 0%. This intentional reserve drawdown strengthens decentralization by reducing central control over network direction.
Owen emphasizes that EF should evolve into an advisory body, enabling open, community-driven governance. With robust infrastructure and global developer participation, Ethereum no longer needs centralized stewardship—aligning perfectly with blockchain’s ethos of transparency and collective ownership.
The Future of Ethereum DeFi: 10x Growth Ahead?
Decentralized Finance (DeFi) remains Ethereum’s strongest use case, though high fees have pushed activity to L2s. Still, the fundamentals are strong—and poised for exponential growth.
Justin Drake predicts a 10x expansion in key DeFi sectors over the next five years:
- Stablecoins: Aiming for $1 trillion in issuance, with growing adoption of decentralized variants like DAI.
- DEXs: The share of decentralized exchange volume versus centralized exchanges continues to rise.
- Lending protocols: Platforms like Aave and Compound are expected to scale significantly.
- Prediction markets: Projects like Polymarket could see massive adoption as global event betting grows.
- Derivatives: Perpetual futures, options, and structured products will mature on-chain.
He also envisions novel applications such as a global decentralized lottery, powered by verifiable randomness, low fees, and worldwide accessibility—offering a fair alternative to state-run lotteries with ~50% administrative cuts.
Owen adds that while DEX TVL remains dominant, high gas fees remain the biggest barrier to broader adoption. However, innovations like EIP-4337 (Account Abstraction) are addressing this by simplifying wallet onboarding—bringing Web2-like ease to Web3 self-custody.
👉 See how account abstraction is making crypto wallets smarter and safer.
In the near future, users will manage digital assets seamlessly—without seed phrases or complex gas management.
Ethereum 2.0: Global Adoption and Developer Appeal
Ethereum 2.0’s shift to Proof-of-Stake (PoS) has transformed the network’s efficiency and sustainability:
- Over 50,000 validator nodes participate globally.
- Staked ETH exceeds hundreds of billions in value.
- Energy consumption dropped by over 99% compared to PoW.
Major institutions—including Microsoft, JPMorgan, and IBM—are integrating Ethereum 2.0 for enterprise use cases like supply chain tracking and cross-border settlements.
For developers, PoS and sharding unlock new possibilities:
- Faster finality.
- Lower deployment costs.
- Support for complex dApps.
Yet challenges remain:
- High entry barriers for new users due to wallet complexity.
- A steep learning curve around PoS, rollups, and sharding.
- Intense competition from chains like Solana offering faster speeds.
- Evolving regulatory landscapes affecting global adoption.
Despite these hurdles, confidence in Ethereum 2.0 remains strong—driven by its unmatched decentralization and developer momentum.
Key Technical Advances: Staking, Restaking, and EIP-7702
Two major innovations define Ethereum’s current technical frontier:
1. Staking & Restaking
PoS enables stakers to earn yield while securing the network. More importantly, it opens the door to restaking—where staked ETH secures additional protocols (e.g., EigenLayer). This turns Ethereum into a modular security layer for the broader Web3 ecosystem.
2. EIP-7702: Smart Accounts for Everyone
Proposed by Vitalik Buterin, this upgrade allows externally owned wallets (EOAs) to temporarily act as smart contracts. Benefits include:
- Social recovery options.
- Gas payment in any token.
- Session keys and multi-factor authentication.
This paves the way for mass Web2-to-Web3 migration by eliminating friction in identity and access management.
Is PoS Good for Decentralization?
Critics argue PoS favors wealthy stakeholders (“ETH whales”), but Owen presents a nuanced view:
While PoW appears permissionless, real-world mining is highly centralized:
- Top 5 mining pools once controlled >75% of hashrate.
- Mining farms cluster in low-energy-cost regions (e.g., Kazakhstan, Texas), creating geographic vulnerability.
- Hardware dependence (GPUs/ASICs) introduces supply chain risks.
In contrast, PoS lowers hardware barriers—anyone with 32 ETH can run a node—and promotes broader geographic distribution.
Moreover, upcoming upgrades like Verkle Trees + EIP-4444 will reduce node storage needs dramatically, enabling lightweight clients and faster sync times—making validation more accessible than ever.
The State of L2s: Fragmentation vs. Chain Abstraction
Today’s L2 landscape is crowded—leading to liquidity fragmentation and poor cross-chain UX.
Owen notes that while rollups excel at scaling, they suffer from:
- Incompatible EVM opcodes.
- Slow withdrawal periods.
- Centralized sequencers in some models.
- Data availability overhead.
However, solutions are emerging:
- Chain abstraction: Users interact with one interface while transactions route across optimal L2s.
- Atomic cross-chain swaps: Enable seamless asset transfers without manual bridging.
The market will naturally consolidate around top-performing L2s—creating a “long tail” where weaker chains fade out.
FAQs: Your Ethereum Questions Answered
Q: What is proto-danksharding?
A: A step toward full danksharding that introduces blob-carrying transactions to improve L2 data availability and reduce gas costs on Ethereum.
Q: How does restaking work?
A: It allows staked ETH securing Ethereum to also secure other protocols (via middleware like EigenLayer), increasing capital efficiency and network security.
Q: Will Ethereum ever reach zero gas fees?
A: Not zero, but fees will become negligible through L2 scaling and data compression technologies like sharding.
Q: Can small validators compete in PoS?
A: Yes—upgrades reducing hardware requirements and proposals to lower minimum stakes aim to level the playing field.
Q: How does EIP-4337 improve user experience?
A: It enables account abstraction, allowing wallets to support features like social recovery, multi-signature controls, and gasless transactions.
Q: Is Ethereum safe from quantum computing attacks?
A: Not yet—but the community is actively researching quantum-resistant cryptography to future-proof the network.
Final Outlook: Ethereum’s Next Decade and Beyond
Over the next 10 years, Ethereum’s primary challenge will be unifying L1 and L2 into a seamless experience—eliminating fragmentation and friction in cross-chain interactions.
In 30 years? Owen believes Ethereum will still matter—as one of the most decentralized, battle-tested networks in existence. Its combination of security, community governance, and continuous innovation positions it as a foundational layer for the digital economy.
👉 Stay ahead of Ethereum’s evolution with cutting-edge Web3 tools.
As development shifts further into community hands and technology matures, Ethereum isn’t just surviving—it’s setting the standard for what decentralized networks can achieve.