In a provocative AMA on April 23, 2025, Charles Hoskinson, Cardano’s founder and Ethereum’s co-founder, warned that Ethereum could vanish in 10-15 years without drastic changes. Citing flaws in its computational model, EVM, and consensus mechanism, he argues Ethereum’s reliance on Layer-2 solutions undermines its value. This article dives into Hoskinson’s analysis and explores how Ethereum can secure its future.
Ethereum’s Strengths and Systemic Weaknesses
Ethereum leads the blockchain industry with the highest Total Value Locked (TVL), powering decentralized finance (DeFi) and NFT ecosystems. Yet, Hoskinson identifies three critical weaknesses:
-
Aging Computational Model: Ethereum’s infrastructure struggles to scale, creating bottlenecks as user demand grows.
-
Inefficient EVM: The Ethereum Virtual Machine, once groundbreaking, now lags behind modern alternatives in performance.
-
Consensus Mechanism Shortcomings: Post-Merge (2022), Ethereum’s proof-of-stake system still grapples with transaction costs and speed.
These issues push Ethereum toward Layer-2 networks, which Hoskinson criticizes as “parasitic” for draining value—such as transaction fees and staking rewards—from the main chain.
Layer-2 Solutions: A Temporary Fix?
Layer-2 networks like Arbitrum and Optimism aim to alleviate Ethereum’s scalability woes by handling transactions off-chain. However, Hoskinson argues they create a fragmented ecosystem, diverting economic activity from Ethereum’s base layer. This dependency weakens Ethereum’s tokenomics and diminishes its intrinsic value, making it vulnerable to competitors with native scaling solutions.
Governance Challenges: A Barrier to Reform
Reforming Ethereum’s architecture requires consensus among a diverse group of stakeholders, from developers to validators. Hoskinson compares the process to a “hostile divorce,” predicting internal resistance to changes in governance or tokenomics. Without a unified vision, Ethereum risks stagnation, much like tech giants Myspace and Blackberry, which collapsed under the weight of their own inertia.
Bitcoin’s DeFi Threat
Hoskinson predicts that DeFi on Bitcoin could overtake Ethereum’s TVL in the coming years. Bitcoin’s evolving ecosystem, with innovations like Taproot and Layer-2 solutions, is positioning it as a viable DeFi platform. As users prioritize cost-efficiency and flexibility, Ethereum must act swiftly to retain its market share against Bitcoin and other blockchains like Solana and Cardano.
Ethereum’s Potential Redemption: RISC-V and 2025 Upgrades
Hoskinson acknowledges Ethereum’s potential to evolve, particularly through Vitalik Buterin’s RISC-V proposal. Transitioning to RISC-V could modernize Ethereum’s execution layer, improving efficiency while maintaining developer familiarity. The Pectra and Fusaka upgrades, expected in 2025, promise enhanced scalability and lower fees, following the success of prior upgrades like Dencun (2024).
Still, Hoskinson stresses that technical fixes alone won’t suffice. Ethereum must address governance and tokenomics to align incentives and foster sustainable growth.
Conclusion: A Call for Bold Action
Charles Hoskinson’s critique underscores Ethereum’s precarious position in the blockchain race. While its TVL dominance and upcoming upgrades offer hope, Ethereum’s reliance on Layer-2s and governance hurdles pose existential risks. To thrive, Ethereum must adopt RISC-V, streamline governance, and revamp its economic model. Failure to adapt could see it eclipsed by Bitcoin’s DeFi surge or other innovative blockchains.