Trump issue coin controversy and the dilemma of Ethereum

Recently, the cryptocurrency market has sparked heated discussions once again. A token named after Trump was issued on the Solana chain, and its market value skyrocketed to hundreds of billions of dollars in a short period, becoming the second largest market cap Meme coin after Dogecoin. This event has not only promoted the development of the Solana ecosystem but also had a profound impact on the entire crypto market.

At the same time, Ethereum, which has the second largest market cap in cryptocurrency after Bitcoin, is facing numerous challenges. Despite the advantages of a spot ETF, its price increase is far behind BTC, SOL, and XRP. Even more concerning is that the Ethereum Foundation has recently faced criticism from the founders of several well-known projects, putting it in a difficult position.

Impact of Trump Coin

TRUMP token is not a product of chance, but rather the result of multi-party collaboration within the Solana ecosystem. This initiative involves several projects, including Jupiter, the largest DEX aggregator on Solana, and the liquidity protocol Meteora, with the support of the well-known market maker Wintermute.

In the short term, the issuance of Trump has caused a large-scale transfer of market liquidity, resulting in a decline in cryptocurrency prices outside the Solana ecosystem. At the same time, it has strengthened the market's recognition of the Solana ecosystem, driving the development of Meme coins and AI coins within the ecosystem, and enhancing the income of DeFi protocols. In addition, this event has also attracted a large number of new users into the crypto market.

In the long run, Trump's move may indicate a lenient attitude towards the regulation of the cryptocurrency industry. The Trump family's layout in the DeFi and RWA (real-world assets) sectors may drive more traditional financial institutions to enter the DeFi space. Meanwhile, domestic cryptocurrency projects in the U.S. such as Solana, Ripple, and Sui may welcome favorable policies.

Challenges Facing Ethereum

The current predicament facing Ethereum can be summarized as "internal troubles and external threats".

Internally, the Ethereum Foundation has recently come under heavy criticism, primarily focusing on its slow actions, frequent sales of ETH, insufficient communication with the community, and issues related to Layer 2 strategy. Several well-known project founders have called for reforms within the foundation, with some even suggesting abandoning Layer 2 to develop Layer 1.

In response to these criticisms, Ethereum founder Vitalik stated that the foundation will make significant adjustments in areas such as leadership structure and communication with the developer community. The foundation also announced its participation in DeFi, planning to inject approximately $150 million worth of ETH. At the same time, there have been suggestions to establish a "second foundation" to complement the work of existing contributors.

On the external front, Ethereum faces strong competition from Solana. Although Ethereum may be slightly ahead in terms of decentralization, it clearly lags behind in scalability. Ethereum improves performance through Layer 2 solutions, but currently, the TPS of the largest Layer 2 Base is still significantly lower than that of Solana.

In terms of the ecosystem, Ethereum has accumulated a large number of developers and users due to its first-mover advantage, and it has a well-established infrastructure. However, recently Solana has begun to surpass Ethereum in terms of the number of new developers and active users.

Future Outlook

Despite facing challenges, Ethereum's future development still has potential. Ethereum is committed to the concept of decentralization in the long term and has established a detailed technical roadmap. In the future, through Layer 2 solutions, Ethereum is expected to achieve high TPS, fast transaction confirmations, and low fees.

Compared to Solana, which is positioned as a consumer-grade public blockchain, Ethereum may be more suitable for developing into a financial-grade public blockchain, focusing on serving traditional financial institutions' Web3 business expansion, especially in the RWA field. Ethereum's stability, degree of decentralization, mature ecosystem, and rich developer resources are all advantages that attract traditional financial institutions.

However, Ethereum needs to take immediate action to address internal management issues and respond to external competitive pressures. As a project that has been running for ten years, the challenges faced by Ethereum are somewhat inevitable. The key lies in whether it can embrace change in a timely manner and promote necessary reforms to maintain its leading position in the cryptocurrency field.