Ethereum, the first and biggest blockchain platform for smart contracts and decentralized applications, is turning 10 this year. Since its launch, Ethereum has gone through some radical changes. Yet it has metamorphosed from a post-ICO hellscape into the bedrock of the decentralized finance (DeFi) movement. This trip has been an emotional rollercoaster with some amazing highs and devastating lows, along with some amazing technological advances. A tireless, passionate, fierce community continues to expand the frontier of what’s possible with blockchain technology.
Genesis and Early Challenges
In late 2013, Vitalik Buterin, one of the original co-founders of Ethereum, released the first draft of the white paper. This document outlined his visionary vision for a truly decentralized and powerful computing platform. Unsurprisingly, in 2015 Ethereum launched their blockchain specifically built for these smart contracts. This ambitious vision soon came to fruition, as the project was able to raise $18.3 million in its ICO just beyond it.
The early years weren’t exactly smooth sailing, either. Ethereum had a head start with that in late 2017. With the onslaught came network congestion, exposing scalability problems that had to be addressed. The rise of CryptoKitties, a blockchain-based game, caused a spike in gas fees, foreshadowing the scalability challenges that Ethereum would face as its popularity grew.
Ethereum Classic was born out of a much heavier chain split, but it lacks the usage or adoption that Ethereum currently enjoys. This result deepens Ethereum’s dominance as the go-to platform for decentralized applications.
DeFi Summer and the Rise of Rollups
By the middle of 2020, Ethereum had become the engine of the exploding DeFi economy. During the "DeFi Summer," Ethereum's DeFi total value locked (TVL) surpassed $1 billion for the first time, signaling the arrival of a new era of decentralized finance.
As DeFi started to take off, Ethereum’s scalability challenges were all the more obvious. Layer-2 scaling solutions, especially rollups, quickly became the favorite solution to solve these problems. Microsoft, Hyperledger Ethereum’s March 2024 Ethereum has a successful Sharding and EIP4844 completed. This improvement made the potential upgrade much more cost effective and accelerated the transition towards rollups. By December 2024, the total value locked in Ethereum rollups surpassed $50 billion. This increase well demonstrated the benefits of this contentious scaling solution.
The Merge and Institutional Adoption
Regardless, on September 15, 2022 a landmark occurrence set Ethereum’s past ablaze. Luckily, the network recently celebrated its successful transition to proof-of-stake (PoS). This transition accomplished more than just reducing Ethereum’s energy consumption; it set the stage for future scalability improvements.
In November 2021, Ethereum’s native currency, Ether, was at an all-time high of $4,891. This incredible move is a testament to the growing demand for Vela from retail and institutional investors alike. As of July 2023, liquid staking accounted for more than a third of Ethereum’s total staking. This trend is indicative of the increasing maturity and sophistication of the Ethereum ecosystem.
The recent approval and launch of Ethereum-based exchange-traded funds (ETFs) in the United States was a major breakthrough. This accord led to a wave of new institutional interest in Ethereum and helped further cement its position as a mainstream asset.
Ethereum Today and the Road Ahead
As of writing, Ethereum is the biggest DeFi blockchain by far, with almost $85 billion in TVL. This milestone further underscores its dominance in the decentralized finance space. It highlights its important position as critical infrastructure in the future of finance.
Looking ahead, Ethereum is clearly going to be an ecosystem in constant evolution. Continuing R&D work has been devoted to making the solution even more scalable, secure, and user-friendly. The Ethereum community is constantly in motion, testing the limits of what blockchain technology can do. They are working towards a more open, decentralized, and inclusive financial system for all.
