Vitalik Buterin defends Ethereum despite bear market concerns

Vitalik Buterin, co-founder of Ethereum (CRYPTO:ETH), has addressed concerns about the network's strength amid a challenging market environment.

In recent remarks, Buterin emphasised Ethereum's strong fundamentals despite a prevailing bearish sentiment and declining market values.

He pointed out that the Ethereum network is strengthening, with transaction fees on Layer-2 solutions like Arbitrum (CRYPTO:ARB) and Optimism (CRYPTO:OP) dropping below $0.01.

Buterin contended that the network's fundamentals are "crazy strong" and refuted claims that Ethereum is weakening.

Buterin's defense follows criticism suggesting that Layer-1 and Layer-2 projects are nearing bankruptcy, with significant value losses for investors.

He responded by highlighting improvements in Ethereum's infrastructure and the promising developments set for the network.

The Ethereum blockchain is preparing for the Pectra Upgrade, scheduled for early 2025, which aims to enhance staking mechanisms, rollup efficiency, and overall network performance.

This upgrade combines the Prague and Electra upgrades to bolster the execution and consensus layers of Ethereum.

Despite these advancements, Ethereum faces ongoing inflationary pressures.

Since the Dencun hard fork in March 2024, which aimed to reduce Layer-2 transaction fees and improve scalability, Ethereum has struggled with an increasing supply of ETH.

The network has entered its longest inflationary period since transitioning to Proof-of-Stake, with a current inflation rate of approximately 0.72% annually.

This trend has undermined Ethereum's "ultra-sound money" narrative, as the total ETH supply has increased from 120,063,605 to 120,291,622 since April.

The upcoming Pectra Upgrade and other planned developments, such as Verkle trees, are expected to address these issues and renew investor confidence.

Verkle trees, slated for implementation in 2025, will facilitate stateless validator clients, enhancing staking efficiency and user experience.

Despite current challenges, Buterin remains optimistic about Ethereum's future and its role in the evolving blockchain landscape.

At the time of reporting, the Ethereum price was $2,638.34.