Alon Muroch, a long-time core contributor to Ethereum and founder of new middleware platform SSV Network, thinks Ethereum is at an inflection point. He emphasizes the importance of decentralization and the need for Ethereum to re-establish a compelling narrative to attract and retain users. Muroch's insights come from nearly a decade of navigating Ethereum's evolution, offering a unique perspective on its strengths, weaknesses, and future trajectory.

Muroch's work is focused on Ethereum. Even today, in his work with Ethereum Governance, he is passionately devoted to Ethereum’s success. By orchestrating 100,000 validators, he secures only 10% of all staked ETH via the SSV Network. Since the very early days of Ethereum he has been actively engaged. He wrote the very first Ethereum clients long before Ethereum even began moving toward Proof of Stake.

Bitcoin vs. Ethereum: A Technological Divide

Muroch is a firm proponent of Ethereum’s technological advancement, especially as it relates to Bitcoin. In it he claims Bitcoin has no smart contracting abilities. He considers Bitcoin to be legacy tech, and Ethereum to be on the cutting edge of decentralization.

He considers the energy needed to secure Bitcoin as wasteful. He believes Ethereum was right to make the transition to Proof of Stake, and hopes Bitcoin will do so one day as well.

"It was one of the best decisions. The amount of resources required today to maintain Bitcoin is crazy. It’s crazy. It’s like saying, let’s continue having coal-powered plants and cars and not switch to gasoline or electric. Why? Because coal is very robust. Fine, but it’s not a really good answer to anything. There are a lot of things that are robust. It doesn’t mean you don’t need to change technology. I don’t think Bitcoin will ever change to Proof of Stake because Bitcoin is stuck in the past in terms of advancement in technology… Of course, we should have switched. There’s no doubt about it.” - Alon Muroch

"Bitcoin has zero capabilities of smart contracting, and so developers basically hacked ways to secure things on Bitcoin. Ethereum has smart contracts, so a lot of those types of use cases simply became contracts on Ethereum. What I’m saying is somewhere in that direction. I believe that the Ethereum validator set has superpowers. It’s the largest, most diverse, and decentralized validator set on earth." - Alon Muroch

Solana's Rise and Ethereum's Response

Though skeptical of crypto overall, Muroch recognizes what Solana has accomplished and the interest it’s generated among developers and users. He says Solana is "basically what EOS should have been if they’d had serious founders." He warns that Solana does this by making much higher technical compromises than Ethereum.

"In terms of technical capabilities, Solana is taking way more trade-offs than Ethereum. It’s not technically as sound as Ethereum, especially from the decentralization, censorship-resistant, and stability point of view. Nonetheless, they’re doing a lot of other really good work, interacting with developers, promoting themselves, communicating why Solana, et cetera, et cetera, et cetera. Ethereum needs to take some of that into what they’re doing.” - Alon Muroch

He notes that it is “about 95% cheaper” when leveraging those validators from Ethereum. He suggests Ethereum can leverage its robust validator set to offer competitive services and attract more value to the network.

"Those validators know how to run high-performance software for a very long time. It has on-chain entities with performance and all of that, plus you see a lot more off-chain components responsible for very significant application services, and so on. If you can have all of those services run using validators on Ethereum and paying them rewards, then you have this stream of revenue and rewards going back to ETH holders.”" - Alon Muroch

The Narrative Imperative

Muroch stresses the urgent need for Ethereum to come up with a more attractive story. He attests to a change in institutional appetite. Institutions that originally came to crypto to learn and understand the transformative potential quickly jumped ship to Ethereum now dismiss decentralization and self-sovereignty. He thinks the Ethereum community needs to face reality. If they don’t aggressively prioritize their actions, the separation might turn out to be tragically fatal.

"It used to be the case that institutions came to crypto to learn, and then immediately went to Ethereum, because that was the only game in town. Now, if you look at Wall Street today, well, they might understand the concepts of decentralization and self-sovereignty, but they don’t care about it. That’s where the narrative plays a major role. You can’t have conferences on Wall Street where Solana and Cosmos and Polkadot are going on stage and explaining why people should use them, and nobody is talking for Ethereum. It’s coming up with a narrative that is compelling.”" - Alon Muroch

He poses a crucial question: Why should the average TradFi user, who doesn't understand decentralization, hold ETH? He suggests Ethereum needs to focus on attracting value back to the ETH token to provide a clear incentive for holding it.

"The challenges Ethereum has right now are not technological. It’s mostly narrative and a simple question: “Why would the average TradFi user, who doesn’t really understand decentralization or TPS, and doesn’t know how to differentiate between Solana and Cosmos, or Ethereum for that matter, hold Eth? It’s a very big question.”" - Alon Muroch

"That's very significant because security is the most expensive component of a decentralized service, and based applications are very aligned with Ethereum because, as I said before, it comes from the point of creating more value back to the holders, so it has that additional dimension… We need to present a way forward, which I think is by prioritizing a way to attract more value back to the token." - Alon Muroch

"When you buy Bitcoin, you hold one of 21 million. That's fine. That's a good narrative, and Wall Street and TradFi and everyone else really connect to that. The Solana narrative is “we can beat Ethereum.” So the reason to hold SOL is that if there’s a price difference between tokens and SOL wins, it’s better to hold SOL than anything else. Why would you hold ETH?" - Alon Muroch

"ETH has nobody to win and compete with. They’re already the biggest smart contract platform, so there has to be another expansion. Historically, there were very good reasons to hold ETH. With ICOs, you had to hold ETH in order to get into ICOs. With DeFi, you had to hold ETH to provide liquidity or to trade. There were really good reasons." - Alon Muroch

"What is the reason now? On my end, the reason is to make Ethereum the trust and security layer for the entire internet of value. If we can make that and attract value back to Eth, the token, then there’s a really good reason to hold it.”" - Alon Muroch