Recently, the Ethereum FUD has sparked heated discussions across the industry. A few weeks ago, a three-hour Twitter Space titled “What’s Going On with Ethereum” brought together various voices, including mine, and featured many insightful perspectives. Topics ranged from the interplay between Ethereum and Layer 2 solutions to considerations of ideology, organizational structure, and historical lessons. This comprehensive discussion shed light on the challenges Ethereum and the broader industry currently face, highlighting the community’s deep care and critical expectations for Ethereum. During the Space, I had some ideas brewing but hesitated to speak up. Knowing my views differ significantly from the mainstream Web3 Native perspective, I was concerned about backlash, given the toxic environment in the industry. As a result, I remained silent throughout. However, I later decided to share my thoughts, hoping to provide a fresh perspective on the challenges Ethereum and the industry face, focusing on the application layer—a topic often discussed but seldom analyzed from this angle. Although my views might not align with the mainstream, I firmly believe that only through rational and honest discussions can we drive the industry toward a healthier path. For those who prefer a concise read, I’ve prepared an AI-generated summary of the article.

Background

Before diving into my perspective, let me first share some context about my current work. Many of you who follow me may have noticed a significant drop in my output and commentary on the industry over the past year.
This shift is largely because, over the past year, as a founding member of Ample FinTech, a Singapore-based FinTech startup, I have been deeply involved in collaborative projects with the central banks of three countries, focusing on tokenization and cross-border payments. This experience has broadened my thought process and shifted my focus beyond the Web3 ecosystem to include the strategic moves of global central banks and traditional financial institutions.
During this period, I have dedicated considerable time to studying blockchain and tokenization research reports and papers published by traditional financial entities to understand their ongoing projects. At the same time, I have stayed connected with the Web3 space through Twitter and discussions with peers to track the industry’s developments. By observing both the Web3 ecosystem and traditional financial systems, I’ve built a more comprehensive framework of understanding, providing me with a fresh perspective on the industry’s future trajectory.

The Divided Parallel Worlds

This dual perspective, simultaneously immersed in two distinct worlds, makes the divide in atmosphere and developmental paths between the two domains increasingly apparent. In the Web3 world, the recurring complaint is the constant emergence of new technical infrastructures, concepts, and terminologies. These developments often intentionally increase complexity and understanding barriers, mainly aiming to appeal to figures like Vitalik or to support exchange-related ventures. After a TGE (Token Generation Event), many projects turn into “ghost towns,” with little concern about real-world utility.
Recently, discussions have shifted toward skepticism about Vitalik and the Ethereum Foundation. Growing voices express frustration that Vitalik and the foundation appear overly focused on “technical philosophy” and “idealistic pursuits,” delving into technical details while showing little interest in addressing user needs or exploring commercialization. This trend has triggered widespread concern in the industry.
In a recent Space discussion, Mr. Myan (@myanTokenGeek) pointed out, drawing from the historical development of the internet, that this disconnect from end users and the market is unsustainable. If Ethereum continues its “tech-above-all” trajectory, these concerns are not unfounded.
Beyond the crypto realm, a starkly different landscape unfolds. Traditional financial powers and governments are dramatically shifting their stance on Web3 technologies. They now view blockchain and tokenization as vital upgrades for existing payment and financial systems and are proactively exploring transformation. This shift is not just recognition of new technologies but also a response to the disruptive threat Web3 poses to established systems.
In 2024, a milestone event occurred: the Bank for International Settlements (BIS), known as the “central bank of central banks,” formally introduced the concept of the “Finternet” (Financial Internet). This groundbreaking proposal positions tokenization and blockchain as the next-generation paradigm for humanity’s financial and monetary systems, sparking a wave of attention across traditional finance.
This is not merely the birth of a new concept but a significant endorsement of blockchain and tokenization by the traditional financial sector. The impact is profound, with global financial institutions and central banks accelerating their efforts in building tokenization infrastructures, digitizing assets, and implementing payment applications.
This monumental step by the BIS is not a sudden whim but the result of years of extensive research. A deep dive into the BIS’s decision-making reveals a gradual development path: as early as 2018, the organization began systematically researching Web3 technologies, publishing dozens of highly specialized research papers.
In 2019, the BIS took a critical step by establishing the BIS Innovation Hub to systematically conduct blockchain and tokenization experiments. This rigorous research and experimentation eventually led them to recognize a vital truth: blockchain and tokenization hold transformative potential capable of reshaping the global financial landscape.

Among the BIS’s experimental projects, mBridge stands out. Launched in 2019 by the BIS Hong Kong Innovation Hub in collaboration with the People’s Bank of China, the Hong Kong Monetary Authority, the Bank of Thailand, and the UAE Central Bank, mBridge is a cross-border CBDC payment bridge. Technically, mBridge operates as a public permissioned chain based on EVM, run by participating central banks as nodes to enable on-chain cross-border CBDC settlements.
However, history often takes dramatic turns. Amid complex geopolitical dynamics, especially following the outbreak of the Russia-Ukraine conflict, mBridge—a project originally aimed at enhancing cross-border payment efficiency—unexpectedly became a critical tool for BRICS countries to evade SWIFT international sanctions. This development prompted the BIS to withdraw from mBridge at this stage. Recently, Russia built upon this foundation to launch the BRICS Pay international payment settlement system based on blockchain, propelling the technology into the forefront of geopolitical competition.
Another landmark BIS initiative is Project Agora, the largest public-private partnership in blockchain history. This project unites an unprecedented lineup: seven major central banks (the Federal Reserve, the Bank of France representing the EU, the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, and the Bank of England) alongside over 40 global financial giants, including SWIFT, VISA, MasterCard, and HSBC.
This extensive international collaboration has a remarkably clear goal: leveraging blockchain and smart contracts to establish a globally unified ledger system while maintaining the current financial order, thereby optimizing the monetary system. This move signals the unstoppable momentum of blockchain technology. Traditional financial forces have transitioned from cautious observation to full embrace, actively driving its application in real-world scenarios.
In contrast, the Web3 industry, while constantly chanting the slogan of Mass Adoption, is actually more focused on hyping meme coins and indulging in the short-term attention economy. This stark contrast inevitably raises the question: While traditional financial institutions are taking concrete steps to promote the large-scale application of blockchain technology, should the Web3 industry reconsider its development direction?

Mass Adoption: Casino or Application?

In this fragmented development trend, we must ask a fundamental question: “What truly constitutes Mass Adoption?” Although this term is frequently discussed in the Web3 industry, there seems to be significant differences in how people understand it.
Looking back at the so-called “hit projects” in the Web3 field over the past few years, a revealing pattern emerges: those projects claiming to achieve “Mass Adoption” are essentially speculative games dressed up as innovation. Whether it’s the endless stream of MEME coins, the “P2E” model disguised as GameFi (like the once-popular sneaker projects), or SocialFi projects promoting social innovation (such as http://Friend.tech), upon closer inspection, all of these are just “digital casinos” carefully packaged. While these projects have attracted a large number of users in the short term, they are not genuinely addressing users’ real needs and pain points.
If allowing more people to participate in speculative trading to drive up coin prices is considered Mass Adoption, then this “Adoption” is merely a zero-sum game where wealth is concentrated in the hands of a few, and its unsustainability is obvious.
I have personally witnessed too many friends from outside the crypto space lose all their money after entering the crypto market, with only a very few truly profiting. This phenomenon has also been confirmed in recent data: A study by an on-chain data analyst showed that on the http://pump.fun platform, only 3% of users made a profit of over $1,000. These cold numbers reflect the reality that profit from crypto trading is a game for only a small minority.
What’s even more worrying is that the entire industry has become a breeding ground for hackers, phishing, and scams, with news of some whale losing a significant amount due to Permit phishing frequently appearing on Twitter. Let alone ordinary retail investors, the latest FBI report revealed that in 2023 alone, U.S. citizens suffered over $5.6 billion in crypto-related fraud losses, with victims over 60 years old accounting for 50% of the total. Many ordinary investors’ interests are left unprotected in this “dark forest.”
The speculation and the increasing severity of hacking incidents are worsening the industry’s environment, which makes us reflect: Are we chasing the wrong direction for “Mass Adoption”? In the frenzy of speculation, have we overlooked the true creation of sustainable value?
It is important to clarify that I am not trying to completely deny the speculative nature of Web3. After all, the vast majority of participants enter this space with the intention of earning investment returns, and this profit-seeking motivation is understandable, so speculation will continue to exist. However, Web3 should not, and cannot, be limited to becoming a global casino. It needs to develop truly sustainable and practically valuable use cases.

Among these, payments and finance are undoubtedly the areas where Web3 technology has the most potential for real-world application. This has already been recognized by traditional financial forces, government authorities, and market players: we see traditional financial institutions exploring various innovative applications on a large scale, including payment system reforms, tokenization of real-world assets (RWA), the integration of DeFi and traditional finance, and the emerging PayFi concept. These active explorations and practices clearly point to the current market’s most urgent needs.
In my personal opinion, the core issue for Ethereum or the industry may not be whether the technological direction is correct, but whether we truly understand what valuable applications are. When we focus too much on technological innovation but ignore market demand, and when we are passionate about creating concepts while distancing ourselves from real-world scenarios, is this really the right direction for development?
This reflection raises a deeper concern: If this development continues, could it be that the traditional financial system or the SWIFT network, which we once aimed to disrupt, may become the main drivers of blockchain’s large-scale adoption? Moreover, could a situation arise where traditional financial powers and government-led public-permissioned blockchain systems dominate most real-world application scenarios, while public blockchains may be marginalized to a niche “speculation playground”?

While the Web3 industry’s attention remains focused on Ethereum “challengers” like Solana, it seems no one is paying attention to the fact that traditional financial forces have already sounded the alarm to enter the space. In light of this dramatic shift, for Ethereum or the entire industry, we must consider not only our current development strategies but also how to position ourselves and define our value propositions as the industry gradually becomes more compliant. This may be the real test the industry faces.
After observing these trends, I have the following thoughts on the path to truly healthy and sustainable Mass Adoption for the industry:
The priority is to solve real problems: Whether in infrastructure or applications, we should base ourselves on real-world needs and focus on addressing actual pain points, such as the many people and small businesses around the world who still lack access to financial services, or the privacy concerns companies face when using blockchain. Ultimately, the value of technological innovation will be reflected in solving these real-world problems.

Next is lowering the entry barriers: The ultimate goal of technology is to serve users, not to create obstacles. Currently, the plethora of terms and complex concepts in the Web3 world has, to some extent, hindered true adoption. We need to make technology more accessible, for example, by using (Based Chain Abstraction) chain abstraction technology to address user experience issues.
Third, creating sustained value: The healthy development of the industry must be based on sustainable business models, rather than relying excessively on speculative hype. Only projects that truly create value can survive in the market over the long term, such as Web3 payments, PayFi, and RWA, among others.
The importance of technological innovation is beyond question, but we must also recognize that application is the primary driver of productivity. Without practical applications as a foundation, no matter how many infrastructure advancements or cutting-edge technologies there are, they will ultimately be just castles in the air.

The Turning Point of Web3 Application Mass Adoption

Looking at history, attempts to integrate blockchain with the real world have never ceased, but they have often failed to materialize due to factors such as timing, regulatory restrictions, or technical limitations. However, the current situation presents an unprecedented turning point: technological infrastructure is becoming increasingly mature, traditional financial institutions are actively embracing innovation and exploring real-world applications, and regulatory frameworks in various countries are steadily improving. These signs all indicate that the next few years could very well be the critical turning point for Web3 applications to achieve mass adoption.
At this crucial juncture, regulatory compliance is both the biggest challenge and the most promising opportunity. More and more signals suggest that the Web3 industry is transitioning from the initial “wild west era” into a “compliance new era.” This shift not only means a more regulated market environment, but also signals the beginning of truly sustainable development.
The signals of this shift are evident on multiple levels:

1.Regulatory frameworks are becoming more comprehensive

• [ ] Hong Kong launches a comprehensive virtual asset service provider (VASP) regulatory system.
• [ ] The EU’s MiCA regulation officially comes into effect.
• [ ] The US FIT21 Act passes the House of Representatives in 2024.
• [ ] Japan revises the “Funds Settlement Act” to provide a clear definition for crypto assets.

2.The standardized participation of traditional financial institutions

• [ ] Large asset management firms like BlackRock launch Bitcoin and Ethereum ETFs.
• [ ] Traditional banks begin offering custody services for crypto businesses and launch tokenized bank deposits.
• [ ] Major payment companies introduce compliant stablecoins.
• [ ] Investment banks set up digital asset trading departments.

3.The compliance upgrade of infrastructure

• [ ] More exchanges proactively apply for compliance licenses.
• [ ] Widespread adoption of KYC/AML solutions.
• [ ] The rise of compliant stablecoins.
• [ ] Privacy computing technologies applied in compliance scenarios.
• [ ] Central bank-level blockchain initiatives (such as CBDC bridges like mBridge, Singapore’s Global Layer 1, BIS’s Project Agora, etc.).

4.Regulatory pressure on Web3 and the compliance transformation of projects

• [ ] The largest decentralized stablecoin project, MakerDAO, transforms into Sky, embracing compliance.
• [ ] FBI’s phishing enforcement of meme coin market makers.
• [ ] DeFi projects begin introducing KYC/AML mechanisms.

In this trend, we are witnessing：

• [ ] More traditional financial institutions entering the Web3 space through acquisitions or partnerships.
• [ ] Traditional financial powers continue to control Bitcoin’s price narrative through Bitcoin ETFs.
• [ ] The rapid rise of the next generation of compliant Web3 applications.
• [ ] The entire industry gradually establishing order under regulatory pressure, with opportunities for overnight wealth becoming increasingly rare.
• [ ] Stablecoin applications shift from speculation to more substantial uses such as international trade.

There is no doubt that the future battleground for blockchain technology will focus on several key areas: payment system innovation, tokenization of real-world assets (RWA), the emerging PayFi concept, and the deep integration of DeFi and traditional finance (CeFi). This reality brings an unavoidable proposition: If the industry is to achieve breakthrough development in real-world applications, it must directly engage with regulators and traditional financial institutions. This is not an optional path, but a necessary one for development.
The reality is that regulation has always been at the top of the industry ecosystem. This is not only an objective fact but also a principle repeatedly validated throughout the past decade of the crypto industry’s development. Almost every major turning point in the industry has been closely tied to regulatory policies.
Therefore, we need to seriously consider several fundamental questions: Should we embrace regulation and seek symbiosis with the existing financial system, or should we adhere to the “decentralized” ideal and continue lingering in the regulatory gray area? Should we pursue a purely “casino-like” Mass Adoption, repeating the speculative-driven path of the past decade, or should we focus on creating real, sustainable value and truly unlocking the innovative potential of blockchain technology?
Currently, the Ethereum ecosystem faces a significant structural imbalance: on one hand, there are continuously stacked infrastructures and endless technological innovations; on the other hand, there is a relatively lagging application ecosystem. In this contrast, Ethereum is facing a dual challenge: it must cope with the strong offensive from new public chains like Solana in terms of performance and user experience, while also guarding against the encroachment of compliance-based public permissioned chains, driven by traditional financial forces, in real-world application markets.
More challenging still, Ethereum must contend with competition from two directions: on one hand, public chains like Solana are capturing more market share and user attention in the meme market with their performance advantages; on the other hand, public permissioned chains, led by traditional financial institutions, are gradually expanding into key application areas like payments and asset tokenization, relying on their natural compliance advantages and large user bases, and may soon take a first-mover advantage in these critical fields.
How to seek breakthroughs under this dual pressure—maintaining technological innovation while remaining competitive in the market—are key challenges Ethereum must directly face as it seeks to break through.
The views above represent my personal perspective and are intended to spark further constructive thought and discussion within the industry. As industry participants, we should all contribute to advancing Web3 towards a healthier and more valuable direction.
Due to my limited understanding, I welcome friendly discussions and collaborative exploration of the future development direction of the industry.

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