Ethereum's Challenges and Opportunities: From Layer2 Ecosystem to Web3 Integration

Ethereum's Challenges and Opportunities: From Layer2 Ecosystem to Web3 IntegrationEthereum, as a leading blockchain platform, has experienced significant growth over the past few years, but now faces both internal and external challenges. On the one hand, while the Layer2 ecosystem is developing rapidly, it has not achieved its expected growth targets, and market competition is fierce

Ethereum's Challenges and Opportunities: From Layer2 Ecosystem to Web3 Integration

Ethereum, as a leading blockchain platform, has experienced significant growth over the past few years, but now faces both internal and external challenges. On the one hand, while the Layer2 ecosystem is developing rapidly, it has not achieved its expected growth targets, and market competition is fierce. The rise of a new generation of high-performance public chains poses a threat to Ethereum's dominance. On the other hand, with the DeFi craze fading, Ethereum needs to find new growth drivers, move beyond the DeFi culture, and achieve a new development path that is more grounded in reality.

I. The Dilemma of the Layer2 Ecosystem: Slowing Growth, Fierce Competition

Ethereum actively addresses performance bottlenecks through scaling solutions such as Rollups. The upcoming Cancun upgrade will bring technological benefits to Ethereum, and the expectations for a long-term sharded chain are gradually diminishing. However, despite the continuous progress in Layer2 technology, its development pace has not met expectations.

1. Layer2 fails to attract more users and ecosystem: While Layer2 has successfully alleviated Ethereum's congestion issues, it has not brought about the expected expansion of the ecosystem, but instead, has led to an outflow of traffic. Developers are more inclined to rely on VC funding rather than value innovation. Excessive involution stifles innovation, impacting project quality and market performance.

2. Layer2 business strategies lack depth: The business strategies of many Layer2 projects are merely at the level of adding leverage and sharing components, failing to effectively attract users and ecosystems. This strategy is difficult to create a real competitive advantage, and has limited positive impact on the Ethereum ecosystem and coin price.

3. The impact of the new generation of high-performance public chains: High-performance public chains such as Solana directly challenge Ethereum's performance issues. While they are not a direct confrontation, they can affect Ethereum's market position. The rise of the new generation of public chains and the emergence of modular thinking are reshaping Ethereum's dominance, and Ethereum is now in a reactive position.

II. The Retreat of the DeFi Craze: Ethereum Needs to Move Beyond the DeFi Culture

The fading of the DeFi craze has forced Ethereum to seek new directions for development, move beyond the pure DeFi culture, and achieve a new development path that is more grounded in reality.

1. DeFiSummer may not return: The decline of the DeFi craze suggests that Ethereum needs to explore new application scenarios, such as NFTs, Web3 games, and the metaverse, to attract more users and developers.

2. Web2 integration is the new trend: Ethereum needs to integrate deeply with the Web2 world, applying blockchain technology to traditional fields, such as supply chain management and digital identity, to achieve wider application and value creation.

3. Moving from virtual to real is the future direction: Ethereum needs to shift its focus from the financial sector to the real economy, applying blockchain technology to real-world problems, such as supply chain finance and digital copyright, to achieve more meaningful applications.

III. Ethereum Market Review and Short-Term Strategies

Overall Structure Analysis

Looking at the ETHUSDT chart, price fluctuations have been significant recently, and the current price is fluctuating between key support and resistance levels.

1. Price trend:

- Upward trend: After experiencing a period of significant upward movement, prices are currently consolidating at a high level.

- Correction phase: The current price is in a correction phase and is seeking support at key support levels.

2. Key areas:

- Resistance levels:

- 2,705.41 USDT

- 2,716.58 USDT

- Support levels:

- 2,616.03 USDT

- 2,590.00 USDT

Short-term Bullish and Bearish Strategies

Bearish strategy:

- Entry point: Consider shorting when the price approaches the upper resistance level (around 2,707.00-2715.00 USDT).

- Target levels: Set the first target level at around 2,616 USDT, and the second target level at around the support level of 2,591 USDT.

- Stop-loss level: Set the stop-loss level above the resistance level of 2,750.00 USDT to avoid excessive losses.

Risk Warning

1. Market volatility risk: The cryptocurrency market is highly volatile, and price movements can be extremely rapid. It is recommended to set stop-loss levels strictly to avoid significant losses due to violent fluctuations.

2. Fake breakout risk: The market can easily experience fake breakouts near key resistance and support levels. Pay attention to trading volume and price reactions to avoid being misled by market fake moves.

3. External factor impact: The cryptocurrency market is highly influenced by external factors, such as regulatory policy changes, market news, etc., which can have a significant impact on prices. It is necessary to closely monitor market dynamics.

Summary

Based on the current ETHUSDT price trend and analysis of key support and resistance levels, short-term bullish and bearish strategies can be formulated. However, it is necessary to be aware of market volatility risks and the impact of external factors, set stop-loss levels reasonably, and ensure that trading risks are controllable. In actual operation, it is also necessary to adjust the strategy in a timely manner according to market changes to ensure capital safety.

IV. Ethereum's Future: Opportunities and Challenges Coexist

Despite facing numerous challenges, Ethereum's technological advantages and ecosystem advantages still keep it in a leading position. In the future, Ethereum needs to actively address challenges, seize opportunities, and achieve sustainable development.

1. Continue to drive the development of the Layer2 ecosystem: Ethereum needs to further drive the development of the Layer2 ecosystem, attract more users and developers, improve user experience, and expand the scope of the ecosystem.

2. Explore new application scenarios: Ethereum needs to explore new application scenarios, such as NFTs, Web3 games, and the metaverse, to attract more users and developers, achieve wider application, and value creation.

3. Strengthen integration with the Web2 world: Ethereum needs to strengthen integration with the Web2 world, applying blockchain technology to traditional fields, such as supply chain management and digital identity, to achieve wider application and value creation.

4. Achieve a development path that is more grounded in reality: Ethereum needs to shift its focus from the financial sector to the real economy, applying blockchain technology to real-world problems, such as supply chain finance and digital copyright, to achieve more meaningful applications.

V. Conclusion

Ethereum, as the leader in blockchain technology, has achieved great success in recent years, but it also faces many challenges. How to address challenges, seize opportunities, and achieve sustainable development are key issues facing Ethereum. With Ethereum's strong technological advantages and ecosystem advantages, it is believed that it can overcome challenges and achieve greater success.