- Ethereum community members had divergent views on ETHâs value and road map.
- The mixed signals from Ethereum leadership could dent ETHâs sentiment. Â
The Ethereum [ETH] leadership has hit the headlines following its long-term roadmap and ETHâs value accrual views. One of the Ethereum community members, Justin Drake, suggested that ETH was like Nvidia and Apple and could attract multi-trillion valuations based on its fees.Â
Drake stated,Â
âEthereum is like a very large business like Nvidia, Apple..we can muster multitrillion valuations purely based on the flows [fees]. And then you know thereâs a whole different topic on top of this base valuation of trillions of dollars for ETH to be money, collateral..for decentralized stablecoins.â
Mixed views on ETHâs value
However, some builders and founders in the Ethereum eco-system disagreed with these perceived leadership views. Sam Kazemian, Founder of DeFi protocol Frax Finance, was one of the critics.Â
Kazemian felt that comparing ETH to Nvidia or Apple would limit the altcoinâs growth potential compared to Bitcoin. He claimed that this valuation wouldnât be a win for the altcoin asset.Â
âETH currently has $1B annual revenue. If we 385x this revenue to match Appleâs that means ETH would 11x to match Appleâs valuation. Does this seem like a winning roadmap for ETH?â
He believed this was a flawed way for the leadership to gauge ETHâs value and might not compete with BTC.Â
âEthereum as a big business where its âbase valuationâ is measured as cash flows from fees give it a fighting chance to catch up or ever overtake BTC?â
He added,Â
âApple has $385B annual revenue, itâs worth $3.3T. BTC has 0 annual revenue & never will have a single dollar of revenue. Itâs worth $1.1T already.âÂ
Kazemian, like most protocol founders, championed that ETHâs primary value should be based on its âstore of valueâ (SoV) and DeFi ecosystem.
ETH leadership saysâŠ
Unlike BTCâs âdigital goldâ tagline, ETH has struggled to have an impactful and unified pitch deck for potential investors. The leadersâ push for âprogrammable moneyâ and âdigital oilâ hasnât grabbed the expected appeal.Â
Ethereumâs DeFi vision has also seen divergent visions from leaders. For example, Vitalik Buterin has been skeptical of pure DeFi as the only crypto growth catalyst.
This was opposed to other community members like Kazemian and Uniswapâs Hayden Adams, who believed DeFi was critical to the growth of ETHâs value.Â
According to Coinbase analysts, this divergent vision for Ethereumâs DeFi has made it hard for new investors to understand the asset and dented its market sentiment.Â
Besides, ETHâs fees have declined considerably since the Dencun upgrade in March, as low-cost blobs prompted users to migrate to L2s.Â
This has also divided the community on whether to tweak blob fees to help ETH L1 gain value from L2s as ETHâs inflation problem compounds post-Dencun upgrade.Â
The above community issues have shattered investor sentiment around ETH even further.
That said, ETH has lost ground to BTC. The underperformance was illustrated by a yearly low on the ETH/BTC ratio, which tracks the altcoinâs price performance relative to BTC. ETHâs value has dropped 44% compared to BTC in the past two years.Â