Author: David Hoffman, Translator: Jia Huan, ChainCatcher. If you missed last week's news, I sold my ETH. Making this decision was no easy feat for someone who has built a career, community, identity, and business empire around Ethereum. The reasons for the sale require a more thorough explanation than a few scattered tweets. The "ETH is money" argument hasn't failed…it has simply materialized. Ethereum has received the ETH price it deserves, and I don't believe ETH as an asset will be revalued, either up or down. "ETH is money," a core narrative proposed by David Hoffman in 2019 and promoted through Bankless, arguing that ETH should become a global store of value, was once one of the most prevalent bullish arguments for Ethereum. P.S.: I am extremely bullish on Ethereum. I expect Ethereum as a network to perform exceptionally well from now on. However, I believe only a very small portion of this success will be reflected in ETH. Currency is a game of coordination, and coordination is extremely difficult. The Ethereum project itself is a series of coordination challenges stacked on multiple layers, and the argument that "ETH is money" requires success, and unquestionable success, at all of these layers. ETH can only become money if and only if every layer of the Ethereum technology and social stack does better than its competitors. Given the ambitious nature of the Ethereum project, achieving its most successful version has always been a tremendous challenge. Despite its shortcomings, the Ethereum project has done an excellent job and fully deserves its current market capitalization. Nevertheless, the window of opportunity for $ETH to be "revalued" by the market seems to be closing. To some extent, ETH is indeed money. But it is not the most successful version we are all pursuing. Ethereum is a coordination game. A Turing-complete blockchain is such a powerful idea that Ethereum's greatest potential is to encompass the entire crypto world. Everything. The only obstacle to Ethereum achieving 100% absolute dominance over everything is coordination. Ethereum's leadership needs to be fully decentralized, and governance needs "coarse consensus" to create reliable neutrality, thereby maximizing Ethereum's adoption at the highest level. Ethereum's leadership needs to react quickly to market dynamics, operating like a startup facing the threat of marginalization. Ethereum L2 needs to be able to operate independently of the base layer and make its own market choices, but at the same time, it needs to be economically tied to and constrained by the broader Ethereum economy and brand.Ethereum's roadmap needs to be executed in a specific sequence to maximize and maintain its momentum and market dominance, thereby effectively quelling competition and maximizing confidence in Ethereum and ETH. The development and engineering of key technologies need to be fast enough for Ethereum to both demonstrate its utility and maintain its lead over competitors. The "ETH is money" argument lies in creating an extremely revolutionary and powerful financial asset that attracts previously indifferent individuals with its unique nature as a superior global store of value. Ethereum's brand and ETH's strength need to be so strong that traditional large funds not only feel safe but also actively include ETH as a significant position in their retirement portfolios due to the dominance of the Ethereum project. To achieve "ETH is money," everything upstream of ETH needs to function perfectly. Ethereum is not Bitcoin; it has chosen a difficult path. Bitcoin chose to strip everything off its blockchain to elevate BTC's status. Ethereum chose to add everything to its blockchain to maximize the utility of its block space. Only by doing this optimally before its competitors can ETH achieve its status as a global currency. We've come a long way, and Ethereum has already achieved its deserved maximum potential market capitalization share. I fear the window of opportunity to play this game has closed. Looking back over the past few years, I see Ethereum facing a multitude of challenges from the broader environment. First, L1 assets are inextricably linked to revenue. No matter how difficult it is to evaluate smart contract chains based on fees and revenue, fees and revenue are clearly how smart contract L1 assets increase their pricing power. By 2026, we have ample data to show that all these factors are closely correlated: L1 activity, L1 fees, and the price appreciation of L1 native assets. In 2021, ETH dominated when it had the highest L1 revenue market share. In 2024, SOL dominated when it surged ahead in L1 revenue market share across the industry. In 2026, NEAR is undergoing a price revaluation, while its L1 revenue and NEAR burning are showing fundamental growth. You can also look at assets like BNB and TRX, which may be the highest-grossing projects of all time. Their price charts look exactly what I expected ETH to look like—provided ETH can maintain its L1 fee dominance for longer than it did in 2022. Secondly, the strong version of the cryptocurrency failed to work.@0xMakesy put it well: Ethereum represents the strong version of cryptocurrency—a cryptocurrency that exists for cryptocurrencies themselves, self-sustaining and self-perpetuating. DeFi, NFTs, DAOs—we were the rebels, building a people-owned, people-enjoyed alternative financial system, connecting imagination to the money system. There also exists a weak version: an efficient ledger infrastructure for the backend of financial institutions. The weak version will fuel the strong version, transforming the demand for internet ledgers into an inward-flowing flow of funds—towards cryptocurrency, to Ethereum, and ultimately into ETH. Perhaps if Ethereum had performed better, faster, and stronger, and if cryptocurrency hadn't attracted such a large group of speculators and value extractors, the industry could have earned the influence and respect I've always believed it deserved. But the only period in which cryptocurrency maintained a positive brand image among the public was from the end of 2020 to the beginning of 2022. Outside this narrow window, cryptocurrency's reputation has been one of fraud, scams, get-rich-quick schemes, and utterly useless to ordinary people. ETH is money dependent on a "strong cryptocurrency"—it emerged as an internet currency at the moment everyone was forced online. The world discovered cryptocurrency for the first time, and in that brief window of time, it was incredibly cool. Money is a game of coordination, and a currency's Schelling point (the focal point of consensus) is what binds people together by belief. In 2021, the general public widely believed in ETH: it was cool, disruptive, and populist. Bitcoin possessed the same properties and retained them better than ETH after 2021. This raises a disturbing possibility: a strong version of cryptocurrency might never have been a stable equilibrium point. The COVID-19 pandemic has been an extremely distorted era for money, and perhaps "ETH as money" is only supported by this distortion. If so, ETH's status as money always depends on a strong version of cryptocurrency performing better than it actually does. Third, Ethereum's utility also benefits other currencies. Is Bitcoin money? Is the US dollar money? Is gold money? It doesn't matter—whatever money is, it will be tokenized on Ethereum. In 2020, Nic Carter suggested at Bankless that stablecoins could potentially be parasitic on ETH, the native unit of Ethereum. At that time, Ethereum had $3 billion in stablecoins. Today, that number is $163 billion, a 54-fold increase. The utility provided by Ethereum is helping to expand the monetary network for any asset that truly belongs to money, which is why the United States is so optimistic about popularizing stablecoins through cryptocurrencies.Ethereum is helping the US maintain the dollar's hegemony, and leveraging this fact is a clear government policy. Clearly, the positive spillover effects of $ETH as a currency are far less powerful than what the US government sees in the Ethereum stablecoin ecosystem. Essentially, Ethereum is a giver, not a taker. It provides the world's most secure block space to L2 at cost. It tokenizes the world's assets at cost. It secures billions of dollars in DeFi at cost. Ethereum doesn't charge a markup for anything it does. This is the essence of open-source software, and this is the power of Ethereum. Ethereum provides the world with its full suite of vital value at cost. Ethereum is noble. Ethereum is excellent. Ethereum is the world's most successful non-profit organization. Naturally, incredible mass adoption will occur on Ethereum. It has been, and will continue to be, the most influential open-source software project ever built by humankind, and being a "non-profit protocol" is one of its core characteristics. This is why ETH's path to becoming a currency depends on its ability to maintain sustained and extremely high market dominance. Ultimately, as block space is commoditized, fees will drop to zero. As long as it's Ethereum, not its competitors, that commoditizes, Ethereum can maintain its profit margins and dominance. Ultimately, the fat protocol theory will give way to the fat application theory, where applications will devour the remaining profits. As long as they are Ethereum's applications and not competitors', this is not a problem for ETH. It's difficult to reconcile the idea that "ETH is money" with the idea that "Ethereum is a giver, not a taker." Ethereum's architecture is intentionally designed to give everything back to its ecosystem and only take the bare minimum necessary to keep the network running. Architecturally, ETH is not prioritized in Ethereum; this is a feature, not a flaw. ETH can only become money if Ethereum wins a battle it architecturally refuses to participate in. This could have worked if Ethereum had maintained its incredible market dominance. "ETH is money" requires everything on Ethereum to run smoothly. The margin for error is much smaller than I initially thought. Ethereum's momentum in 2021 and 2022 made it seem like "ETH is money" was the default path. In hindsight, Solana's rise in 2021, accompanied by a surge in anti-Ethereum sentiment, was the first major indication that the coordinated game between Ethereum and ETH was not proceeding as planned.The Ethereum Foundation needs decentralization and the ability to allow for alternative power structures. But it also needs to respond to market forces with the urgency and drive of startups facing existential threats. The L2 teams need the freedom to self-determine, but also need to operate under the larger umbrella of Ethereum and ETH. The technological synchronization and integration between Ethereum and its L2 needs to be executed much faster. Smart contract chains are valued through fees, and to break free from this model, Ethereum needs to rewrite the rules with overwhelming success. I sold simply because it hadn't reached its full potential. Ethereum did something noble by choosing the most difficult, ambitious, and ideologically pure path for its future. It achieved some incredible victories and failed to win some challenges. Ethereum has earned its deserved market capitalization. I am very bullish on the Ethereum network and its ecosystem—Ethereum is architecturally designed to maximize the success of its applications, L2, and ecosystem. The fat application theory means that Ethereum's applications take all the fees, and the Rollup-centric roadmap means that L2 takes 97% of the profits. As for ETH as an asset, I find it difficult to see a structural revaluation, whether it goes up or down. Therefore, my reason for selling ETH was not because I was bearish on ETH, but because I believed the argument that "ETH is money" had been proven true, and I wanted to allocate the funds to other opportunities in the market that I saw potential in. [ChainCatcher]