Ethereum has become the dominant infrastructure layer for decentralized finance, stablecoins, and blockchain applications, yet prominent community members are openly questioning whether the network's success translates to gains for ETH token holders. The tension between Ethereum's role as a value-creating platform and its ability to capture that value for its native asset has moved from theoretical debate to urgent community conversation, raising questions about whether the network and its token can remain aligned long-term.

Why Are Ethereum's Most Vocal Supporters Losing Confidence in ETH?

David Hoffman, co-founder of Bankless, one of the most influential Ethereum media outlets, recently published an essay titled "Why I Sold My ETH" that crystallized growing doubts within the community. Hoffman's argument centers on an architectural reality: Ethereum was designed to maximize value for the applications, layer-2 networks, and stablecoin protocols built on top of it, not for ETH holders themselves.

Hoffman framed his decision not as a bearish call on Ethereum's future but as a logical conclusion. "The ETH is Money thesis didn't fail," he wrote. "It played out. Ethereum got the ETH price it deserves, and I don't see ETH being rerated as an asset, higher or lower." His core argument rests on what he calls Ethereum's fundamental generosity: the network supplies layer-2 networks with secure blockspace at cost, tokenizes global assets at cost, and secures billions in decentralized finance at cost, taking no markup for any of these services.

"Ethereum is a Giver, not a Taker. It supplies L2s with the world's most secure blockspace, at cost. It tokenizes the assets of the entire world, at cost. It secures billions of dollars in DeFi, at cost. Ethereum takes no markup for anything it does," Hoffman stated.

David Hoffman, Co-founder of Bankless

The most striking evidence Hoffman cites involves stablecoins. Ethereum hosted $3 billion in stablecoins in 2020. As of his writing in May 2026, that figure stands at $163 billion, a 54-fold increase. The overwhelming majority of that value is denominated in U.S. dollars, not ETH. This dynamic, Hoffman argues, means Ethereum's infrastructure success is helping entrench other forms of money rather than ETH itself.

What Do Ethereum's Defenders Say About the Network-Token Separation?

Not everyone accepts that the network and token can be cleanly separated. Joseph Chalom, CEO of SharpLink, the largest Ethereum treasury company and a former BlackRock digital assets executive, offered a competing perspective. "There is no Ethereum without ETH," Chalom argued. "The asset and the network are inseparable".

Chalom framed current Ethereum skepticism as a repeat of early Amazon doubts, where critics fixated on short-term metrics while missing foundational infrastructure being built. He emphasized that the total addressable market for Ethereum is not crypto trading but the entire global financial system, and that ETH's intrinsic value is tied directly to the expansion of the network.

"In nearly every market cycle, the moments when retail capitulates and sentiment is lowest are when disciplined capital steps into the opportunity," Chalom noted.

Joseph Chalom, CEO of SharpLink

SharpLink has staked billions in ETH and recently announced a $125 million DeFi yield fund alongside Galaxy Digital, positioning the firm's posture as a direct answer to the capitulation narrative. The company's substantial commitment to ETH staking represents institutional confidence that the network's long-term value creation will ultimately benefit token holders.

How Is the Ethereum Foundation Responding to Leadership Departures?

The debate unfolds against a backdrop of uncertainty at the Ethereum Foundation itself. Multiple senior executives have recently departed the organization with minimal explanation, raising questions about the foundation's strategic direction and commitment to the network's future.

Ethereum co-founder Vitalik Buterin defended the departures, arguing they reflect strategy rather than dysfunction. He noted that having talented individuals with public respect and mission alignment work outside the Ethereum Foundation is necessary if important tasks are to attract outside capital. On personal conviction, Buterin emphasized that nearly 90 percent of his net worth remains in ETH.

However, Dankrad Feist, a former Ethereum Foundation researcher, identified a structural problem. The Ethereum Foundation controls less than 0.1 percent of all ETH, receives no staking or fee revenue, and has no direct economic stake in Ethereum's market performance. Feist argued that the way to save Ethereum is for the community to create an organization that is economically aligned with Ethereum and accountable to it.

Understanding Ethereum's Core Architecture and Why It Matters

To understand the debate between Hoffman and Chalom, it helps to understand what Ethereum actually is. Ethereum is a decentralized, programmable blockchain platform that runs smart contracts, which are self-executing agreements written in code. Unlike Bitcoin, which was designed primarily as a store of value, Ethereum was built to be a "world computer" that can execute applications automatically without relying on a company, bank, or government to approve or shut them down.

This programmability is why much of today's digital asset economy runs on or settles back to Ethereum. The network supports decentralized finance (DeFi), stablecoins, tokenized real-world assets, non-fungible tokens (NFTs), and layer-2 networks, which are secondary blockchains that process transactions more cheaply and quickly before settling back to Ethereum for security.

ETH, or Ether, is the native asset used to pay transaction fees, secure the network through staking (where validators lock up ETH to earn rewards), and support on-chain financial activity. As of late May 2026, ETH trades around $2,000 with a market capitalization near $250 billion, making it the second-largest cryptocurrency after Bitcoin.

Ways to Think About Ethereum's Value Proposition

• Infrastructure Layer: Ethereum provides the foundational security and settlement layer for thousands of applications, stablecoins, and layer-2 networks that build on top of it, similar to how the internet provides infrastructure for web applications.
• Fee Capture Mechanism: Every transaction on Ethereum requires payment in ETH to cover computational costs, known as gas fees, which theoretically creates demand for the token and compensates validators who secure the network.
• Monetary Policy Through Burning: Since the EIP-1559 upgrade in August 2021, a portion of every transaction fee is permanently destroyed, or "burned," which reduces ETH's circulating supply and theoretically supports token value over time.
• Staking Rewards: After Ethereum's transition to Proof-of-Stake in September 2022, validators can earn rewards by locking up ETH to secure the network, creating an economic incentive to hold the token.

What Does the Stablecoin Explosion Reveal About ETH's Future?

The stablecoin data Hoffman highlighted is particularly revealing. Ethereum's stablecoin ecosystem grew from $3 billion in 2020 to $163 billion by May 2026, yet this explosive growth in value on Ethereum's infrastructure has not necessarily benefited ETH holders. Most stablecoins are pegged to the U.S. dollar, meaning they represent dollar value, not ETH value.

This dynamic illustrates what Hoffman calls Ethereum's architectural generosity. The network provides the infrastructure, security, and settlement layer that makes stablecoins possible, but the value captured remains in dollars rather than flowing back to ETH. The U.S. government now views Ethereum's stablecoin infrastructure as a tool for extending dollar hegemony, according to Hoffman, which means Ethereum's success as infrastructure may entrench other forms of money rather than ETH itself.

The core question Hoffman raises is whether this dynamic is a bug or a feature. He argues it is a feature: "Architecturally, ETH is not prioritized in Ethereum, and this is a feature, not a bug. ETH becomes money only if Ethereum wins a fight it architecturally declines to fight".

Where Does Ethereum Go From Here?

The debate has clarified something the Ethereum community had been discussing in murkier terms for years: Ethereum's path to relevance as infrastructure is largely settled. The network has won that battle. Its path to relevance as a monetary asset, however, remains unresolved. Those are two different arguments requiring two different answers.

Whether Ethereum can find a new story that accounts for both its architectural generosity and its token's need to capture value is the question the community must now answer. The departures from the Ethereum Foundation, the loss of confidence from influential voices like Hoffman, and the structural misalignment between the foundation's incentives and the network's success all point to a community at an inflection point. Ethereum has succeeded as infrastructure. The challenge now is whether it can succeed as an asset class for those who believe in its future.