Cosmosification of Ethereum

Reflections about the future of Ethereum based on the Meher Roy thread.

Meher Roy (chemical engineer, biotechnologist, entrepreneur, blood cancer survivor) recently raised an extremely interesting topic for discussion in the Ethereum community. Ethereum is a cryptocurrency and platform for creating decentralized online services based on blockchain, working on the basis of smart contracts. It was launched on June 30, 2015.

“Long uni (Uniswap), short eth (Ethereum).” — Meher Roy.

It all started with this powerful phrase. And after that, the author introduced the term “Cosmosification” and called it the reason for his concerns as an ETH holder. The thread has grown by more than one hundred replies.

What is “Cosmosification”? This term originates in the Cosmos network that serves a hub for other blockchains. The same is true for Polkadot. So, the author calls “Cosmosification” “trend of a central ecosystem developing token being progressively weakened due to a bad business model & transactions (MEV) being exported to other infrastructure.” And it is this problem, according to Meher Roy, that is a huge risk for Ethereum over the next 5 years.

In addition, Meher Roy addresses the problem of switching Dapps to Layer 2 (L2). L2 technologies was launched in 2021. According to the author, “Every Dapp that migrates from Eth to L2’s strengthens the business case for the token of the L2, not ether.”

Despite the fact of “Cosmosification”, warns the author, he adds that in the case of DeFi tokens, this process is quite effective. Meher Roy gives Uni as an example.

“Ergo, Long Uni, Short Eth.” — Meher Roy

To summarize the thread, the author considers the main problem to be that the Ethereum mainnet is losing its leadership in relation to L2. The thread caused a wide discussion in the Ethereum community. Christoph Jentzsch from corpus.venturesentered the discussion with a counterargument. And started a new thread.

According to the State of the Dapps chart, the number of new Dapps on Ethereum grew rapidly and by February 2018 reached a record high of 129 new Dapps per month. After that, the number of new Dapps began to fall. As for the total number of Dapps, it is steadily growing, but the growth rate decreases over time. At the time of writing this article, according to DappsRadar, there are more than 3380 different Dapps running on the Ethereum network.

The Ethereum community on Twitter is actively discussing Meher Roy’s thread, but so far, there have been no comments from the co-founders. We continue to observe.