Ethereum co-founder Vitalik Buterin has announced an ambitious plan to simplify the Ethereum blockchain, calling for a major cultural shift and a return to fundamentals in the project’s approach to complexity and development. After persistent criticism of Ethereum’s growing complexity, Buterin addressed the issue explicitly, acknowledging that Ethereum’s extensive technical layers pose significant hurdles to welcoming and onboarding new developers.
Ethereum currently secures nearly $60 billion in assets on its chain, primarily locked within various decentralized finance mechanisms and supplemented by Layer 2 and Layer 3 solutions designed to overcome scalability limitations. These layer-based scaling solutions augment Ethereum by improving transaction throughput and user adoption, all while benefiting from the security provided by Ethereum’s foundational blockchain.
Buterin outlined his vision to radically simplify Ethereum, even suggesting the possible replacement of the Ethereum Virtual Machine (EVM) to achieve a more straightforward, Bitcoin-inspired blockchain design. In his recent proposal, Buterin praised the simplicity and usability of Bitcoin’s blockchain structure, noting that its straightforward design makes it accessible for hobbyists and developers alike, who can easily understand and build on the protocol without requiring highly specialized expertise.
Buterin proposed that Ethereum adopt a similarly uncomplicated structure, enforcing tight limitations on overall code complexity and the number of architectural layers. He argued that trimming down Ethereum’s complexity would significantly reduce costs, both in building and maintaining infrastructure, while simultaneously improving the chain’s performance and resilience.
His roadmap sets a clear objective: Ethereum must become as simple and manageable as possible over the next five years, ultimately aiming to rival Bitcoin not just in simplicity but also in ease of understanding and flexibility for new entrants.
Interestingly, this initiative coincides with Ethereum’s ETH/BTC price ratio recently reaching its lowest point since January 2020. Although it sunk to as low as 0.01766, the ratio has since partially recovered, indicating emerging investor optimism surrounding Buterin’s simplification plan. At present, the ratio trades around 0.02237.
Critics had earlier labeled Ethereum’s transition to Proof-of-Stake (PoS), known as the Merge, as a shift away from decentralization. However, Buterin counters this perception, asserting that simplifying Ethereum aligns directly with decentralizing it. He sees complexity reduction as essential to fostering true decentralization, arguing that a less intricate blockchain can better empower community-driven development and resilience.
Buterin recognizes that these changes involve a deep cultural shift within the Ethereum ecosystem. The ultimate benefits, he admits, might not be immediately obvious, potentially appearing intangible at first glance, yet essential for Ethereum’s long-term sustainability and growth.
On a shorter timeline, Ethereum’s price recently ended a consolidation period and began climbing upward. Currently approaching immediate resistance around $2,550, significant support remains at the $1,850 level in case of a retracement. Technical indicators such as the RSI and MACD both support the likelihood of continued bullish momentum.
Meanwhile, institutional flows into Ethereum ETFs show mixed signals. U.S.-based spot Ethereum ETFs experienced net outflows totaling $16.11 million earlier this month, diverging from Bitcoin-focused products, which continue to see positive net inflows.
Despite short-term institutional hesitancy, Ethereum retains a dominant position in the growing realm of tokenized real-world assets (RWAs). Recently, BlackRock launched a tokenized U.S. Treasury fund, BUIDL, built atop the Ethereum blockchain. Since its debut in early 2024, BUIDL has attracted over $2.5 billion in managed assets, reinforcing Ethereum’s leadership in asset tokenization. Indeed, Ethereum presently controls about 74% of the tokenized U.S. Treasuries market, with total assets exceeding $6.2 billion.
These factors underscore the foundational confidence underpinning Ethereum’s recent price gains and the optimistic outlook for its medium-term performance.
