Are the defi chains and layer 2 pressing the value of Ethereum? Dive

bitcoin published one of his worst returns of the first quarter in 2025, ethereum worked even worse, with more than 45% reduction in its price. The price of ethereum has been in Declive since the Dencun update in March 2024. The fall of ethereum seems driven by the protocols of layer 2 that accumulate a large volume of transactions and transmit the fraction of income to the eth chain.

ethereum (eth) leaned into its role as a security infrastructure and the underlying block chain for layer 2 protocols, climbing the cryptographic ecosystem and losing its value for 2025. Merchants and investors who have the largest Altinea.

<h2 class="wp-block-heading" id="ethereum-powers-layer-2-scaling-mainnet-loses-traction”>ethereum Powers Layer 2 Scale, Mainnet loses traction

ethereum began with the aim of becoming the decentralized computer of the world, and the chain accumulated value from the ICO, which met to its peak of $ 4,878 in November 2021. Since then, eth erased 71% of its value for four years.

The most notable change that is considered the catalyst for the decrease in the ether price is its scale of scale centered on layer 2. ethereum changed its main role as the main network to the chain that adds value and power the scale of layer 2. The movement driven by the Dencun update that reduced the transaction costs for the chains of layer 2, remodel the dynamics of the ethereum ecosystem.

The use of ethereum as a base chain became significantly cheaper for layer 2 projects and layer 3, promoting a large defi ecosystem. By Coinbase has accumulated $ 94 million in profits and has paid a cost fraction, $ 4.9 million to ethereum.

The profitability of the chains of layer 2 has turned on the debate on whether layer 2 is squeezing the value of ethereum or promoting the association where they obtain security and transmit income to the eth block chain.

<h2 class="wp-block-heading" id="dencun-upgrade-reduced-eth-value-transaction-revenue-declined”>Reduced update of the eth value, transactions income decreased

The Dencun update caused the settlement of layer 2 cheap enough to reduce the entry barrier for the DEFI protocols. ethereum has crossed $ 44 billion in the total value of blocked assets and a decrease in rates collected by the network has interrupted the objective of converting the alternative “deflationary”.

With a lower volume of rates collected by the chain, while ethereum is not deflation, the offer is expected to grow less than a percentage per year, according to the ultrasound money tracker. Experts in encryption in x and merchants in exchanges have questioned the value proposal of ethereum in the light of their business model changed.

Pectra updating, the following key update of the ethereum ecosystem could replace the value of the chain if it stimulates the demand.

<h2 class="wp-block-heading" id="ethereums-returns-and-eth-price-are-increasingly-tied-to-fees-and-burn”>ethereum yields and eth price are increasingly linked to rates and burns

ethereum holders and merchants analyzed metrics such as the total value of assets blocked in the chain and the volume of transaction, relevance and demand, previously, to determine the price of eth. ethereum is now more and more valued in the rates generated by the chain, the token burn and the net income generated.

With the fall in rates and migration of value and transactions to layer 2s, a key metric, the ethereum transactions count shows a strong decrease.

To make things worse, institutions lost interest in the ether, probably attributed to the pivot in the business model of the chain and the ethereum Foundation has sold eth in a way in recent months, which raises concerns among merchants.

The ETF ethereum based in the USA. UU. They failed to obtain interest from institutional investors and tickets have been silenced for 2025.

What to expect from the pein update?

The pein update will affect the validators and bitch posts in the ethereum ecosystem. Pectra will introduce ethereum improvement protocols that rationalize validator management, reduce congestion in the chain, improve the efficiency of the validator deposit and provide greater control to stakers on the exit of validates.

Although the update is full of relevant technical updates of the developer to the block chain, the changes are expected to generate a higher value in ethereum.

The sirty update will have a significant impact on the validators of ethereum and the Stakers, introducing EIP that rationalize the management of the validator, reduce the congestion of the network, improve the efficiency of the validator deposit and empowers the stakers with more control over the validity outputs.

Marko Rathovic, graphite network, a monitoring tool prepared for companies and a layer 1 block chain, told crypto.news,

“Pin is expected to have a positive impact on the growth of users of the L2 network, since two of the new EIP are directly aimed at this: EIP-7691 increases the number of blobs per block, and EIP-7623 increases the cost of call data on calls that encourage the use of blobs on call data.

In general, says Ratkovic, Pin is a big step forward.

The Executive explains with the example of EIP-7702:

“Take EIP-7702, for example, it allows you to send transactions without the need of the native token. This solves a long-standing problem that used to require high solutions such as the service station network, but now it is abomoted natively at the protocol level.

At the same time, ethereum updates remain of a technical nature and do not directly address the widest gap between tradfi and defi. While ethereum focuses on rationalizing incorporation, reducing overload and improving performance, institutional players are more concerned about legal clarity, user verification and prevention of illicit flows. “

Chains such as Graphite could solve the challenges faced by institutional investors, which supports the ecosystem as a whole.

Dr. Sean Dawson, Chief of Research of Derive.xyz, a decentralized platform of options in the chain, told crypto.news:

“As the volatility continues to increase, we are seeing the implicit volatility (IV) for the eth jump from 71.5% to 122%, which reflects the uncertainty of the market and the fears of greater chaos.

Looking towards the future, the probability that eth will fall below $ 1,400 to May 30 is almost doubled from 18% to 33% to April 8, which indicates a greater bearish feeling in the market.

In summary, we are on a trip full of potholes, and it is likely that volatility remains high since traditional and digital markets continue to react to these macroeconomic clashes. Merchants and investors must prepare to obtain more uncertainty in the weeks to come when the market navigates these turbulent waters. “