1/9) Ethereum is dying while L2's dance on its grave ETH cannot sustain high fee revenue because it lacks the capacity At the same time, L2s are seeing record highs in usage & fees while they lobby to keep ETH's capacity down! That is what makes it a parasitic relationship: 🧵

2/9) Since EIP-4844 (Proto-Danksharding), fee revenue has collapsed! That is why the fee burn can no longer catch up with inflation, as L2s are taking all the fees instead! This is why inflation has risen over ETH ever since L2s took over, as ETH has outsourced all execution...

3/9) Fragmenting the entire ETH ecosystem into separate competing camps Breaking up liquidity & composability Without any realistic possibility of putting the shattered pieces back together As solutions such as shared sequencing go against L2 incentives, just like L1 scaling!

4/9) This also pushes the users into centralized L2s As every single L2 in the top 20 (stopped counting after 20) can now steal user funds & censor This is ironic, considering that the entire "L2 scaling" roadmap was justified in the name of decentralization... A bait & switch

5/9) That is what happens when we put ourselves at the mercy of a centralized decision-making process The total rejection of on-chain governance by the ETH community could only have one outcome: Capture, resulting in what is effectively centralized control over ETH development!

6/9) With L2 money now dominating the ETH ecosystem A pivot back to L1 scaling becomes impossible In the hypothetical scenario of ETH scaling the L1 with a new breakthrough tech It would crash the token & equity price of all L2s overnight by making them obsolete & unnecessary!

7/9) L2s are effectively stealing ETH users & fees By pretending they are the "same" as ETH, but that could not be further from the truth At best, they are competitors; at worst, it is a vampire attack, slowly draining ETH of life L2s will migrate or become L1s, while ETH dies

8/9) That is why we can be bullish on certain L2s & not on ETH As ETH has sacrificed itself in favor of L2s, even if that trade made cypherpunks cry! That ETH follows the same pattern of corruption & capture we saw in BTC is significant Exposing systemic problems in governance

9/9) That is why there is little hope left for ETH; its leadership sold out for L2s Scaling ETH would destroy all capital & fees earned by L2s, as VCs cannot skim from L1 scaling These parasites have twisted a public good & turned it into a platform for VC chains to rent-seek!