Galaxy Digital in depth analysis: A turning point of turbulence has arrived, and Ethereum is deeply mired in governance fragmentation and value anchor crisis

A rare internal turmoil is sweeping through Ethereum, the world's second-largest cryptocurrency ecosystem. The core backbone has resigned intensively, old believers have completely cleared their positions, community disputes continue to ferment, coupled with unclear development paths and chaotic value narratives, the former "king of public chains" is entering a stage of darkness. In Galaxy Digital's view, this round of turmoil is not simply a personnel change, but a concentrated outbreak of Ethereum's long-term governance misalignment, ineffective value capture, and fragmented development concepts, marking its official entry into a critical period of strategic restructuring.

1、 Mass exodus of core team, complete loosening of faith camp

Recently, the Ethereum Foundation has once again experienced a wave of high-level and core researcher resignations, which has dealt a heavy blow to ecological confidence. Researchers Carl Beek and Julian Ma have officially announced their resignations, adding another heavy blow to the current round of personnel turbulence. Sorting out the list of resignations since 2025, it almost covers the core structure and protocol research and development circle of the foundation: joint executive director Tomasz Sta ń czak, joint director of the board Josh Stark, core contributor of the protocol guild Trent Van Epps, protocol team leader Barnab é Monnot and Tim Beiko have successively left, and senior researcher Alex Stokes has also started a three-month long-term vacation, resulting in a significant gap in the core talent pool.

Data shows that eight core members of Ethereum have left in the past five months, with five of them leaving intensively in May. The speed and scale of personnel turnover have reached a new high in recent years. Even more deadly, the reversal of stance by top believers in the community has completely shattered market sentiment. David Hoffman, co-founder of Bankless Podcast, once publicly claimed that 99% of personal assets were allocated to ETH, making him one of the core advocates of Ethereum. However, he has now officially announced the full liquidation of all ETH holdings, symbolizing the large-scale loosening of the early faith circle.

It is worth noting that this round of turbulence occurred shortly after the implementation of the foundation's heavyweight program document, the March Agenda. This 38 page core document establishes the four underlying principles of Ethereum CROPS, namely adherence to censorship resistance, open source attributes, privacy, and network security. At the same time, the core positioning has been clarified: the Ethereum Foundation is not the dominant operator or promoter of the ecosystem, but only serves as one of the many maintainers of the ecosystem to fulfill its basic responsibilities.

Faced with a large-scale wave of resignations, the official has not disclosed a unified reason or provided a public explanation, and the continued silence has caused collective concern and questioning in the community. Prysm client developer Potuz bluntly stated that intensive resignations are a typical manifestation of the Ethereum institutional system being influenced by interests and deviating from its original intentions. Dankrad Feist, a senior researcher who previously resigned and joined the leading public chain Tempo, proposed a radical rectification plan, suggesting the establishment of an independent special fund with a scale of 1 billion US dollars, directly supervised and managed by ETH holders, to reconstruct the ecological governance system and fill the current mechanism loopholes.

2、 Deep ecological lesions: narrative confusion, value loss, market patience depletion

Underneath the surface of personnel turmoil lies the deep-seated contradictions accumulated by the entire Ethereum ecosystem over the long term. The current community is generally exhausted and confused, and the market has long been tired of Ethereum's fluctuating development path and vague and hollow value capture logic, no longer accepting the perfunctory argument that "transformation pains are the norm of decentralization".

The core trigger for the emotional collapse is the long-term weak market performance and value logic failure of ETH. In the early days of the industry, the native tokens of top public chains were the most stable core configuration in the cryptocurrency market, but this traditional logic has completely disintegrated. The classic era of "fat protocols" has come to an end, and the era of "fat applications" has fully arrived: the total market value of Ethereum exceeds 300 billion US dollars, but the vast majority of the ecosystem's revenue, traffic, and value increment are divided among upper level DeFi, NFT, and various application projects. The underlying public chain itself is difficult to accumulate economic value, and the value support continues to weaken.

The iteration of market structure further amplifies Ethereum's competitive disadvantage. In the past, the core holders of ETH were mostly cryptocurrency native practitioners who highly recognized the underlying native values such as net neutrality and decentralization; The mainstream institutional funds and allocation funds currently entering the market are becoming more utilitarian, and will place ETH as a horizontal benchmark across the entire track: compared to the reserve asset attributes of Bitcoin ETFs, the trading heat of HYPE track, the privacy narrative of ZEC, and the deflation and circulation logic of AI track, Ethereum has complex tags but no core highlights, and its track advantages are continuously diluted.

The core reason why this round of resignation controversy has triggered a far more intense public opinion shock than before is that market consensus has already loosened. Although each departing employee has reasonable personal reasons, the official silence for a long time has led to multiple speculations in the market, such as talent fatigue, salary imbalance, factional struggles, ideological rupture, structural restructuring, and confidence collapse. At the same time, the rapid rise of emerging public chains and the continuous diversion of track dividends have highlighted Ethereum's declining strategic laxity and weak growth.

3、 Core contradiction torn apart: Foundation's neutral positioning completely deviates from market-oriented demands

Galaxy Digital pointed out that the essence of the current Ethereum turmoil is the fundamental opposition between the demand for market-oriented development and the underlying positioning of the foundation.

From the perspectives of holders, developers, and market participants, as a leading public chain with a value of billions, the Ethereum Foundation should undertake market-oriented operational responsibilities: focusing on ecological expansion, optimizing value capture, boosting asset prices, maximizing holder returns, actively participating in industry competition, and responding to track shocks.

But the March Agenda has completely delineated the boundaries, and a unified consensus has been formed within the foundation: the core mission of the institution is to adhere to net neutrality, uphold CROPS underlying principles, ensure network security and decentralization, not responsible for market value management, not leading ecological commercialization, and not pursuing short-term market returns.

In short, the market wants a leading public chain that is proactive, commercialized, and continuously generates wealth, while the foundation insists on being a neutral, open-source, and unbiased underlying infrastructure. The core demands of the two are incompatible, ultimately leading to ideological differences, talent loss, and community fragmentation, which is also the root cause of all current crises in Ethereum.

4、 Industry review: Solana's recovery can serve as a reference, but Ethereum's predicament is more complex

In the history of the encryption industry, top public chains have emerged from deep crises, and Solana after the FTX crash is the most valuable reference sample. At that time, SOL's market value plummeted, its ecosystem collapsed, its brand reputation was severely damaged, and it was on the brink of being eliminated. But the team quickly corrected the mistakes, filled in the technical gaps, established a clear public chain positioning of "high throughput, popularization, and high activity", relied on the Meme track to activate traffic and revitalize the ecosystem, and ultimately achieved a desperate recovery.

However, Galaxy Digital emphasizes that Ethereum cannot simply replicate Solana's comeback path. Ethereum has a larger scale, highly concentrated institutional holdings, stronger compliance constraints, and is deeply constrained by its core positioning of "net neutrality", making it unable to iterate aggressively, commercialize quickly, and chase hot topics like emerging public chains. However, Solana's recovery logic of "unified narrative, focus on core tracks, firm execution, and rapid repair of weaknesses" remains a key reference for Ethereum's breakthrough.

5、 Breakthrough Path: Simplify Narrative, Focus on Barriers, Reconstruct Ecological Value System

To emerge from the turbulent quagmire and rebuild market confidence, Ethereum must put an end to strategic swings, comprehensively reconstruct from four dimensions: technological iteration, track layout, value narrative, and governance mechanism, and build core barriers based on existing advantages.

At the technical and track level, Ethereum needs to abandon its vague positioning as a generalized "global computer" and focus on its irreplaceable core tracks: high-value DeFi ecology, global stablecoin settlement, RWA real asset tokenization, privacy finance infrastructure, post quantum security system, and AI agent underlying economic infrastructure. It should concentrate resources on cultivating advantageous areas, form differentiated competitive barriers, and rely on its "trusted neutrality" underlying attributes to create unique value.

At the level of value narrative, Ethereum urgently needs to thoroughly streamline its messy labels. At present, it is burdened with multiple identities such as reserve assets, secondary collateral, technology targets, privacy infrastructure, and AI circulating tokens, and multiple positioning offsets each other, resulting in the inability of the market to form a unified value perception. In the future, it is necessary to extract concise, precise, and implementable core value logic, unify the entire ecological narrative system, and solve the problem of value anchor loss.

At the implementation level, it is necessary to anchor clear goals in the short term: steadily promote the upgrade of Glamsterdam and the implementation of Hegot á core projects, ensuring that technological iterations are not disconnected; Publicize the internal power and responsibility structure and governance rules of the foundation, putting an end to market speculation; Continuously optimizing the value capture mechanism, breaking the industry dilemma of "applications eating meat, public chains drinking soup", and allowing ecological prosperity to feed back the underlying ETH value.

6、 Conclusion: Painful reconstruction may become the beginning of decline

In Galaxy Digital's view, this round of personnel turmoil and community fragmentation is a crucial watershed in the development of Ethereum. If we can quickly correct the situation, unify our strategy, focus on the core track, and repair governance loopholes in the future, this round of turbulence will only be a temporary pain, and it will be a necessary process for the reconstruction and iterative upgrading of ecological rights and responsibilities.

On the contrary, if talent loss continues, strategies remain lax, and governance conflicts cannot be resolved, Ethereum's core decentralized community collaboration advantage will completely evolve into the biggest collaboration weakness. In the current fiercely competitive public chain, this turbulence may become a turning point for its decline, gradually losing its leading position in the industry and market discourse power.