Ethereum's Post-Merge Evolution: Where ETH Stands in 2025

The Merge Was Just the Beginning

When Ethereum switched from Proof of Work to Proof of Stake in September 2022, it was the biggest technical upgrade in crypto history. Three years later, the Ethereum ecosystem has transformed. As a Bitcoin maximalist who tries to be fair, here's my honest assessment of where Ethereum stands.

What's Changed Since The Merge

• Energy consumption: Down 99.95% — this is genuinely significant and eliminated the biggest criticism of Ethereum
• Issuance reduction: ETH issuance dropped dramatically, with periods of net deflation during high network activity
• Staking ecosystem: Over 30 million ETH now staked, creating a massive security budget
• Layer 2 explosion: Rollups like Arbitrum, Optimism, Base, and zkSync have dramatically increased throughput
• Blob transactions: EIP-4844 (Proto-Danksharding) reduced L2 costs by 90%+

The Scalability Picture

Ethereum's scalability roadmap is centered on Layer 2 rollups. Here's the current state:

Layer 2	TPS	Avg Fee	TVL
Arbitrum	~40	$0.01-0.10	$10B+
Optimism	~30	$0.01-0.10	$7B+
Base	~50	$0.001-0.05	$8B+
zkSync	~20	$0.01-0.15	$3B+

Combined, Ethereum and its L2s now process significantly more transactions than any other blockchain ecosystem. That's an objective fact.

Where I'm Critical

Despite the progress, serious concerns remain:

• Validator centralization: Lido controls ~28% of staked ETH, and the top 4 staking services control over 55%
• MEV (Miner Extractable Value): Sophisticated actors front-run transactions and extract value from users
• Complexity: The system is incredibly complex — multiple L2s, bridges between them, different trust assumptions
• Monetary policy: ETH's issuance rate can be changed through governance — there's no equivalent of Bitcoin's hard cap
• Foundation influence: The Ethereum Foundation still has outsized influence on protocol development

Ethereum vs Bitcoin: Different Goals

Here's my nuanced take: Ethereum and Bitcoin are trying to do different things. Bitcoin is optimizing for being perfect money — scarce, decentralized, censorship-resistant. Ethereum is optimizing for being a general-purpose computation platform. Both can succeed, but they're not in the same competition.

Where I draw the line is when people call ETH "sound money" or "ultra sound money." It's not. It doesn't have a fixed supply. Its monetary policy is governed by a foundation and staking interests. It's an interesting technology platform, but it's not money in the way Bitcoin is money.

Should You Hold ETH?

If you believe in the smart contract platform thesis, ETH is the most battle-tested option. But it should never replace Bitcoin in your portfolio. Bitcoin is your savings layer. ETH is a technology bet. Know the difference.

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