- Feist warns fragmented layer-2 liquidity risks Ethereum’s dominance; targets 1,000x scaling without sacrificing core principles.
- Bitwise CIO Hougan: Ethereum acknowledges scalability challenges but faces uncertainty in executing high-stakes upgrades.
September 21, 2024 — Dankrad Feist, a researcher at the Ethereum Foundation, has warned that Ethereum risks fading into obscurity within five to ten years without immediate changes to its transaction capacity.
His proposal, Ethereum Improvement Proposal (EIP) 7938, seeks to raise the network’s gas limit by 100 times over four years, aiming to expand the number of transactions processed per block. Feist described the plan as “unconventional” but necessary to prevent Ethereum from losing ground to rival blockchain networks.
A bit more on the reasons for my EIP to scale Ethereum L1 100x over 4 years:
— Dankrad Feist (@dankrad) April 30, 2025
EIP 7938 arrives amid ongoing debates about Ethereum’s ability to handle growing demand. Feist argues that Ethereum must position itself as the primary hub for economic activity rather than ceding influence to layer-2 networks like Arbitrum or Optimism.
Fragmented liquidity across these secondary platforms, he contends, could weaken Ethereum’s dominance. The proposal targets a 1,000-fold scaling increase while maintaining core features such as censorship resistance and transaction verifiability.
Bitwise Chief Investment Officer Matt Hougan acknowledged the urgency behind Feist’s plan. “Ethereum has realized it’s in a hole and stopped digging,” Hougan stated, referencing past delays in addressing scalability. However, he cautioned that implementing solutions remains uncertain.
Increasing the gas limit carries risks, including potential strain on network nodes and higher storage demands. Critics argue that aggressive scaling could compromise decentralization, a key Ethereum principle. Feist’s proposal does not yet have a clear implementation path, leaving room for technical and community pushback.
Ethereum’s current transaction throughput trails competitors like Solana, which processes thousands more transactions per second. Without adjustments, Feist warns, users and developers may migrate to faster, cheaper alternatives.
Ethereum’s native token, ETH, showed no immediate price shift following the proposal’s release. ETHNews analysts note that long-term investor sentiment hinges on Ethereum’s ability to balance scalability with security. The network’s transition to proof-of-stake in 2022 improved efficiency, but transaction costs and speeds remain sticking points.
Feist’s warning underscores a broader challenge: adapting blockchain infrastructure to meet user demands without sacrificing foundational values. Whether Ethereum can execute such changes—and retain its position—will shape its trajectory through the decade.
Ethereum is currently trading at $1,861, posting a +3.74% daily gain, with a consistent uptrend forming this week. Over the last 7 days, ETH is up +3.64%, and +2.20% over the past month, signaling early signs of recovery. However, ETH remains down -25.86% over 6 months, -44.12% year-to-date, and -38.21% over the past year. These metrics show that Ethereum is in a mid-term consolidation phase, attempting to reclaim bullish structure following a deep market correction.
From a technical standpoint, ETH is currently trading between $1,750 and $1,850. A breakout above $1,850 could trigger a rally toward $2,000–$2,100, especially if confirmed with strong volume and sustained demand.
The market structure suggests a potential ascending triangle formation, and the oscillators are gradually shifting from neutral to bullish. The key resistance to watch is $1,900, while support holds around $1,750–$1,700.
Institutionally, Ethereum remains a top interest. A wallet tied to Cumberland DRW, a major liquidity provider, recently withdrew over 27,600 ETH (valued over $50 million) from centralized exchanges like Binance and Coinbase—typically a bullish signal suggesting accumulation. This is a clear sign of increasing whale and institutional participation.
On the fundamentals, Ethereum is preparing for the highly anticipated “Pectra” upgrade, introducing 11 new EIPs, including EIP-7702. This proposal will allow user wallets to function as smart contracts, enabling fee sponsorship and gas payments in alternative tokens, not just ETH. This change could significantly improve the user experience and scalability of the Ethereum ecosystem.
