# Introduction: A Breakthrough Signal in the Dull Era of ETH?

Since 2024, the price of ETH has significantly lagged behind the performance of BTC and SOL, resulting in a considerable gap from previous market expectations. Bitcoin has shown strong performance in this cycle, while Ethereum faces competition and market contention from emerging Layer 1 networks like Solana and Sui, as well as Layer 2 solutions like Base and Arbitrum, making it difficult for ETH prices to rise in sync. On the other hand, the decline in mainnet usage has led to a shrinkage in revenue, weakening the burning effect of ETH and further suppressing price performance. Additionally, this is also related to the poor performance of Ethereum's spot ETF, low institutional adoption, and reserves. In this market environment where "BTC shines while ETH struggles," many believe that the traditional system can no longer effectively boost the protection and growth of Ethereum's value. There is also dissatisfaction within the Ethereum ecosystem regarding the current situation. Some community members attribute the price slump to strategic missteps and governance issues of the Ethereum Foundation (EF), including "weakness and inaction, centralized governance, low transparency, organizational bloat, and lack of strategic foresight." Although the EF announced a strategic reorganization in June 2025, it has not fully dispelled external doubts.

Against this backdrop, Ethereum core developer Zak Cole announced the establishment of the Ethereum Community Foundation (ECF) at the 8th Ethereum Community Conference (EthCC 8) held in Cannes, France, in July 2025, proclaiming that "ETH reaching $10,000 is not a joke, but a necessary requirement!" He pointed out that the ECF will "say what the Ethereum Foundation dares not say and do what the Ethereum Foundation is unwilling to do," clearly stating that the core mission of the ECF is to support the Ethereum ecosystem in the form of assets and to push ETH to $10,000. This declaration reflects the community's disappointment with past governance methods and has sparked widespread discussion about whether this can leverage the Ethereum market.

This article will explore the background of the establishment of the Ethereum Community Foundation, analyze the fundamental reasons for ETH's price slump in this cycle, conduct an in-depth analysis of the ECF's mission and strategy, compare the differences and conflicts between the ECF and the Ethereum Foundation (EF), and discuss the actual impact that the establishment of the ECF will have on the Ethereum ecosystem and ETH prices. Finally, we will look ahead to the development trends of the Ethereum ecosystem in light of market reactions and potential future paths.

# Why is ETH Lagging Behind? ------ Analyzing the Five Reasons for Price Slump

Source: https://www.tradingview.com/symbols/ETHBTC/

Since the beginning of this year, the ETH/BTC price ratio has continued to decline, reaching a short-term low of 0.01867 on May 25. According to the latest data from July 10, the current ETH/BTC price ratio is 0.02493, down 52.8% compared to the same period last year. The reasons for Ethereum's weak performance in this cycle are multifaceted and can be summarized in the following five points:

1. Impact of Ethereum's Economic Model and Upgrades

From a technical perspective, the Dencun upgrade in March 2024 significantly changed Ethereum's economic model. This upgrade introduced Blob transactions, which greatly reduced Layer-2 fees, leading users to flock to Layer-2 solutions like Polygon and Optimism. These networks diluted the liquidity and trading demand on the mainnet, causing Ethereum's mainnet fee revenue to plummet, with mainnet income nearly dropping by 99%. At the same time, due to lower fees, less ETH was burned, causing the network to shift from deflationary to inflationary, which reduced value support in the long term. Additionally, mainnet activity has also shown a downward trend, with some data indicating that trading volume has fallen to multi-year lows post-Dencun, raising market concerns about the effectiveness of the upgrade.

The Pectra upgrade plan, set to launch in 2025, focuses on improving staking efficiency, contract performance, and scalability. However, so far, this upgrade has not significantly improved market expectations. The negative impacts brought by the completion of key upgrades (low burning and high supply) have been greater than anticipated, putting pressure on prices.

2. Market Risk Aversion and Spot ETF Fund Flows

Since the second half of 2024, various macro events have triggered significant market fluctuations, leading to a rise in global risk aversion. Historical data shows that during price declines, Ethereum often experiences larger drops. Grayscale noted that Ethereum's average decline in recent rounds of downturns was about 1.2 times that of Bitcoin, and in this round, it was close to 1.8 times.

The initial listing of Ethereum's spot ETF attracted a wave of funds, but this enthusiasm gradually waned at the beginning of 2025. Bitcoin continued to attract capital, while ETH's performance remained tepid. Although this situation began to improve in late April, it still fell short compared to Bitcoin's performance. As of July 10, 2025, the assets of Bitcoin's spot ETF in the U.S. were approximately $137.5 billion, while Ethereum's spot ETF assets were only about $11.4 billion, indicating weak institutional buying.

Source: https://www.coinglass.com/eth-etf

3. Intensifying Market Competition and Diversion of Hotspots

Recent diversification of market hotspots has led to a dispersion of investor attention. On one hand, the U.S. plans to establish a strategic reserve for Bitcoin, with several state governments publicly supporting BTC, attracting significant investor attention and capital inflow. On the other hand, competitive public chains like Solana (SOL) and Binance Smart Chain (BNB) have rapidly expanded their ecosystems through the meme craze, resulting in significant price increases for related assets. Additionally, other blockchain networks represented by Base, Sui, and Tron have also briefly attracted large amounts of speculative capital, which has somewhat weakened Ethereum's market attention.

In contrast, Ethereum has recently lacked blockbuster applications or innovative concepts that could generate widespread market consensus, especially as the pace of innovation in the DeFi sector has significantly slowed, leading to Ethereum's ecosystem being marginalized in hotspot competition. Meanwhile, the rapid rise of Ethereum Layer-2 networks (such as Arbitrum and Optimism) has effectively solved the scalability issue but has also objectively dispersed ecosystem resources, reducing the trading activity on the mainnet and further leading to a decline in market attention.

Source: https://dune.com/Henrystats/ethereum-vs-solana

4. Low Institutional Demand and Interest

Institutional capital remains highly concentrated in Bitcoin, with significantly lower demand and attention for Ethereum. Currently, most countries or institutions' strategic reserves are still primarily in BTC, with very few incorporating ETH into long-term asset allocations. Although in July 2025, the New York-listed company Bit Digital announced a complete abandonment of Bitcoin, transferring nearly all its assets into ETH and planning to become one of the largest publicly listed ETH holders globally, such actions remain isolated cases in the institutional market. Additionally, some established blockchain companies like BTCS and Sharplink Gaming have begun to lay out Ethereum staking businesses, but these companies are relatively small and have a limited impact on overall market sentiment.

It is evident that large institutions, publicly listed companies, and government strategic reserves hold significantly less ETH compared to BTC, and the clear preference for institutional capital has limited the upward valuation potential of Ethereum. In the current market environment, ETH has yet to form a sufficiently strong institutional recognition and capital attraction.

5. Large Holder Sell-offs and Liquidity Uncertainty

Recently, there has been a phenomenon of large holding entities, represented by Jump Crypto, Paradigm, and Golem Network, reducing their holdings of Ethereum. These institutions previously held a total of up to $1.5 billion in ETH. Some of these assets were transferred to exchanges and sold, exacerbating the market's selling pressure.

At the same time, changes in Ethereum's network staking reward rates and fluctuations in the number of active validators also suggest that ETH's circulating supply is in dynamic adjustment. These uncertainties on the supply side not only increase the volatility of the ETH market but also create additional downward price pressure in the short term, significantly impacting market sentiment.

In summary, the changes in the technical economic model, macro and leverage risks, competitive landscape, institutional preferences, and liquidity structure have collectively contributed to Ethereum's recent relative stagnation.

# The Mission of ECF and Its Comparison with EF

The ECF approaches with a "market mindset," attempting to enhance ETH's status as a core asset through funding and policy tools. The Ethereum Community Foundation (ECF) claims to "serve ETH holders, say what EF is unwilling to say, and do what EF is unwilling to do." They have set their "North Star" for Ethereum at a price target of $10,000, believing that only when the price and network security increase in tandem can ETH's long-term value be guaranteed.

1. The Mission and Positioning of the Ethereum Community Foundation (ECF)

The ECF claims to have raised millions of dollars worth of ETH from anonymous ETH holders and community donors, and will fund projects based on the three principles of "promoting burning, no tokens, and immutability" that do not issue their own tokens, are deployed on the Ethereum mainnet, and directly promote ETH burning. The strategies disclosed by the ECF include:

• Promoting high-burning applications: Funding on-chain high-transaction-volume projects (such as financial derivatives and RWA tokenization) to generate substantial fees that promote ETH burning, compressing circulating supply to boost prices.

• Accelerating institutional adoption: Providing integrated solutions for banks and enterprises, positioning Ethereum as a global settlement layer, and attracting traditional financial capital.

• Community governance empowerment: Establishing the Ethereum Validators Association (EVA) and introducing a token-based voting mechanism to give PoS validators greater voice in protocol upgrades and fund allocation.
  Transparency in funding: All funding decisions will be determined through community token voting, with 100% transparency in fund flows, aiming to avoid the "black box operations" criticized in the past by EF.

The ECF points out that its focus areas include infrastructure development, enhancing ETH value, maximizing ETH burning, extreme transparency, institutional participation, and government collaboration. The ECF plans to enhance the economic foundation of Ethereum through improved network infrastructure and data availability, connecting with regulators, and optimizing "blob space" pricing, aiming to build an ecosystem model centered on ETH appreciation.

2. Key Differences from the Ethereum Foundation (EF)

The significant differences between the ECF and the existing Ethereum Foundation (EF) in vision and operation mainly include:

• Goal Orientation: The ECF clearly prioritizes raising ETH prices as its primary goal, viewing "ETH value soaring" as key to validating network security; whereas the EF traditionally emphasizes long-term ecological and technical development (such as protocol upgrades and zero-knowledge research) and does not directly pursue price as a goal.

• Funding Principles: The ECF adheres to the funding conditions of "no tokens, promoting burning, and immutability": all approved projects must be deployed on the Ethereum mainnet, must not issue new tokens, and smart contracts cannot be arbitrarily upgraded to ensure that all economic value directly benefits ETH holders. In contrast, ecological projects funded by the EF (such as Uniswap, ENS, Optimism, etc.) eventually issued their own tokens. The ECF criticizes this practice of "genesis project token issuance" as "economic feudalism," while the EF tends to favor diverse ecological investments without insisting on the "fat protocol" theory.

• Governance Model: The ECF emphasizes 100% transparency: all funding proposals and fund flows are determined by community voting and publicly disclosed. Its goal is to allow holders to directly supervise fund usage and criticize the existing EF system for "centralized decision-making and lack of transparency." The EF, as a traditional non-profit organization, primarily derives its funding from the sale of ETH over the years, with internal decisions driven by a core team and committee, often criticized by the community for lacking real-time oversight and decentralization.

• Ideology: The ECF openly claims to represent "the interests of holders," with its founding team boasting that it follows a path of "ETH-centric capitalism"; the EF, on the other hand, promotes "trustworthy neutrality" and public product support, focusing more on protocol neutrality and long-term development. For example, the EF focuses on community education, consensus layer, and execution layer research, and typically avoids making direct statements about price; the ECF, however, does not shy away from viewing ETH as an asset class and using price targets to "calibrate" all decisions.

Overall, the emergence of the ECF is both a manifestation of dissatisfaction with the traditional foundation model and a discussion within the Ethereum community about balancing "ecological construction" and "asset value." In the future, whether the ECF can fulfill its grand goals of enhancing ETH value and maintaining network security, and whether the EF can reform its governance to respond to community concerns, will influence the development direction of the Ethereum ecosystem. The collision of different ideologies and strategies may bring new evolutionary opportunities to this decentralized network.

# Analysis of ECF's Impact on the Ethereum Network and ETH Prices

The establishment of the ECF has multiple potential impacts on the Ethereum network and ETH prices. If the ECF can operate as planned, its potential impact on the Ethereum network could be profound.

1. Impact on the Ethereum Network Ecosystem

• Infrastructure and Technical Aspects: The public product projects that the ECF focuses on (such as improving blob data pricing) are expected to enhance mainnet performance and Layer 2 collaboration, strengthening Ethereum's overall technical ecosystem.

• On-chain Activity and ETH Burning: If the ECF successfully promotes high-transaction-volume applications such as real-world asset tokenization, it will directly increase Ethereum mainnet transactions and gas consumption, thereby amplifying the burning effect of EIP-1559 and enhancing ETH scarcity.

• Validator Governance: The Ethereum Validators Association (EVA) funded by the ECF will empower stakers with a voice in protocol improvement routes, potentially changing the governance landscape of the Ethereum network, giving validators greater influence over fee structures and proposal priorities.

• Relationship with Layer 2: By encouraging the use of Ethereum's blob space rather than third-party data networks, the ECF's initiatives may keep more Layer 2 activities within Ethereum's settlement layer, preventing the mainnet from being marginalized.

• Long-term Ecological Impact: If the ECF guides more developers to focus on the construction of non-token public utilities, it may reshape the value perspective of Ethereum's DApp ecosystem, encouraging more projects to return to the Ethereum mainnet and use ETH as a value carrier, consolidating Ethereum's position of "trustworthy neutrality" in public chain competition.

2. Impact on ETH Prices

• Supply and Demand Fundamentals: The large-scale burning of ETH and the increase in actual applications promoted by the ECF will improve the supply-demand structure of ETH—supply contraction combined with rising demand is expected to provide positive support for prices.

• Market Confidence and Expectations: The ECF's bold proposal of the "ETH $10K" target establishes a new benchmark for expectations in the minds of investors. This clear price direction may attract attention from both inside and outside the market, rekindling confidence in ETH.

• Institutional Capital Inflow: If the ECF successfully promotes Ethereum as a global financial settlement layer, and if its collaborations with traditional institutions expand smoothly, large institutional capital may enter ETH assets through corporate chain modifications and spot ETFs. This will provide potential new buying power for ETH.

• Risks and Uncertainties: It is important to be cautious that an excessive emphasis on price may attract regulatory scrutiny or market skepticism. If the ECF fails to deliver results in the short term, it may disappoint investors. On the other hand, the concentration of the ECF's funding strategy also brings risks of market influence by a few individuals, which some may view as a speculative gimmick. Additionally, the ECF's core initiator, Zak Cole, has previously participated in several projects, but some of these projects did not achieve ideal price performance after airdrops or trading, which may lead to trust uncertainties.

In summary, the ECF may inject new vitality into the Ethereum network by focusing on public infrastructure, on-chain finance, and governance transparency. If these measures can be successfully executed, they will help enhance the economic efficiency of the network and drive ETH prices upward. However, the actual effects still need to be verified by subsequent project implementations and community participation. Even with the support of a foundation like the ECF, the key to driving prices upward will still depend on whether macroeconomic conditions, regulatory policies, and technological upgrades are in place.

# Conclusion and Outlook: Community Awakening or Speculative Gimmick?

The emergence of the Ethereum Community Foundation reflects both dissatisfaction from certain groups regarding the current state of Ethereum and divergent interpretations of its future. This could either be a community awakening—a victory of grassroots power against centralization, pushing for the maximization of ETH value; or it could merely be another speculative gimmick—a "carefully packaged wealth code." The ECF's high-profile slogans and aggressive roadmap precisely capture the community's desire for price recovery, but whether it can deliver remains to be seen in the long term.

Looking ahead, the direction of the Ethereum network and ETH prices will be influenced by multiple factors. One of the driving factors is the continued inflow of institutional investors, as some publicly listed companies and large institutions begin to treat ETH as a long-term asset for regular investment. The Pectra upgrade will further improve data transmission efficiency, paving the way for on-chain applications, especially in AI/Web3 scenarios, which is expected to increase network utilization and lead to more ETH burning. Additionally, if the ECF successfully implements on-chain asset issuance and infrastructure investments, it will inject new momentum into the Ethereum ecosystem and support ETH value.

Regardless of the outcome, the emergence of the ECF has already reflected the internal divisions within the Ethereum ecosystem: some people yearn for quick returns and price prosperity, while others focus more on technical progress and long-term innovation of the protocol. The key in the future will be whether the ECF can promote substantial project implementations under its framework of "transparency, no tokens, and promoting burning," and whether these projects can withstand market scrutiny. If it can achieve this, the ECF may become an important variable in driving ETH to regain growth momentum; otherwise, it may just be a high-profile promotion that fades into silence after the excitement.

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