Ethereum’s biggest problems in 2025

Transcript

Welcome to the Alo Capital podcast. If you're just joining us, this season we are summoning Alo Capital, a new spin-off from Gitcoin that's designed to build the capital allocation layer of the tokenized internet. We think there's big upside here. Capital allocation is a multi-t trillion dollar design space. VCs, governments, NOS's, and Dows all have to allocate capital to survive and thrive. But it's also a place we can start small. Every time you spend money, you are allocating capital. We are threading a throughine partnering with builders, researchers, and funders to figure out what onchain next generation capital allocation looks like. Building it onchain. If you want to learn more, you can visit our website at alo.cap where you can download the Alo books for free, play with some of our DAPs, join the Telegram, or participate in the DAO.

All right. Today, our guest is Tamas, the founder of Nethermind and co-executive director of the Ethereum Foundation. Tamas was appointed as co-executive director in March 2025 with HWW. Together they focus on scaling Ethereum's layer 1, integrating the data blobs and enhancing the user experience of Ethereum. Tomas also is known as the founder of of Nethermind, a leading Ethereum execution client known for its performance and stability. Under his guidance, Nethermind has become integral to Ethereum's infrastructure. And in May 2025, he co-founded Lantern Capital, a venture capital firm focusing on earlystage investments in AI and blockchain, bridging traditional venture capital with emerging technology. I'm also joined on this episode by my

co-founder and co-host, Reena O'Brien. And uh together we talked to Tomas about the Ethereum Foundation, the Ethereum ecosystem, where is it going? Where is that road map going to lead us? How what does Tomas think of the app layer? What is uh he think is missing in the app layer? How can we better support builders? How can we solve Ethereum's biggest problems as a network of capital allocators? And uh I think this is a really interesting episode to get inside the new uh coed of Ethereum Foundation's head on where things are going and how the Gitcoin Alo Capital and Ethereum ecosystem, the network of builders and talented doers, thinkers and impactors can help the Ethereum ecosystem. So, I

think you're going to enjoy this episode with Reena and Tomas. [Music] Hey, Tomas. Hey, Reena. Hey, Rocky. Hey, Thomas. Hi, everyone. Tomas, do you want to kick us off with a intro? Sure. Hi, I'm uh Tomas. I joined Ethereum Foundation as a co executive director with SA two months ago. And before that for a few years I was working on Ethereum core development infrastructure building and also working with a few companies in the space. So I said the board of stark net building twin stick institutional staking I was working flash bots building oiler uh D5 protocol. So quite a lot quite a lot

around Ethereum and uh before that a long time long time ago it was uh traditional finance on technology side I was working at a hedge fund called Rockos Capital and before that at city bank working on the FX dirt team. I'd love to start by just checking in. It's such a whirlwind of an industry right now and it's a time of great change and you're sort of in the eye of the storm. How you doing? Yeah doing great. I think that's uh maybe because so many people are expecting some changes without even maybe specifying that much what they need. So so everyone is supporting whatever change it is. I feel there a honeymoon everyone is uh super nice and willing to collaborate. I think that maybe also the realization that there

was uh a lot of changes and opportunities in the in the industry uh also uh the word crisis about Ethereum. Uh so everyone wanted to help and wanted to feel like look this is this is important moment strategically this is important moment tactically so if I participate it if I participate in it it will be it will be important for me in the future like so that's that's what other people think I I imagine that and suddenly you see a lot of a lot of voices like waking up after after a few years uh and ready to to fight for for the values that they were fighting in the past and maybe they they already succeeded and partially retired and now they think like hey yeah I need it again

and I I want to help. So this is fantastic moment to to be active and to to listen to people and try to just aggregate that and and help others to execute. What are the biggest opportunities you think right now especially while you're in honeymoon phase biggest opportunities uh for Ethereum I think that's the final finally green light for institutions to to start using Ethereum. Uh suddenly there there's so many people like there was probably new generation coming to to financial markets and already building the awareness of of what digital assets are. Uh already being there and wanting to use it and over and over again being blocked and stopped and said no we

cannot touch it because of not because something is wrong with technology. It's not ready or or it wouldn't work in the future. It's not the future. they would hear that simply there is some regulator that's absolutely not allowing them to do that. Uh so that change just unblocked so many people eager to to build it and show that it works. So this is huge opportunity and I think that another opportunity is that the moment that institutions having this green light the general mood changes like that you uh there's less voices that will tell everyone that this is this is wrong that this is this is just crime or or gambling or so people understand yeah like this this really transformational technology that solves lots of problems you know borderless solutions payments

new models of governance uh it's massive and and then we'll finally reach even more people and we see that this year as well like as a massive opportunity how many users are being on boarded by the Ethereum ecosystem. It's now we're counting that in millions of people that actually will be ready to start using apps and payments much more readily and we see the uh you know the prediction markets uh we see payment systems identity solutions the AI solutions probably just behind the corners and like massive boost of AI usage more than one opportunity a lot of them we are fixing Ethereum's marketing problem go ahead yeah fixing marketing problem uh yeah I'm just just for the fact that there are opportunities now that we

talking so positively about it u and I think that also there is a question whether foundation should uh should deal with marketing problem directly should it be understood as a marketing in the in a type of branding logo voice the message uh social media like traditional advertising or or I think it's more really about Ethereum Foundation having strong communication uh like openness to communication and clarity of of voice of strategy, a message that can be multiplicated by others like amplified by others and um and then I think there's lots of fantastic businesses built on Ethereum that simply advertise it. I was saying

that that now you go like institutions go to to alto beat go to grow the pie go to rwaxyz or like the ethereum adoption.com they go to this dashboards and they see ethereum logo and ethereum name everywhere and they use this name so even if they whatever L2 they're using very often they they remember so clearly there's Ethereum so that marketing happens and it happens in a very strong way like this is this is technology that we use this is technology that changes the world this is technology at which we are looking and we analyze ing technology that brings security to and and permissionless access to the world to the financial markets and allows others to also exist even if they're not maybe traditionally allowed to those markets

because of being in the underdeveloped like financially financial markets wise underdeveloped spaces. Tomas, uh, you and your co-executive director, HWWW, wrote on the Ethereum Foundation blog a couple weeks ago that there's three major directives in Ethereum for the next 12 months. Scaling the L1, scaling blobs, and improving UX. And you also just unrolled your your values that that you champion, which I understand have been consistent over many years. Censorship resistance, open-source innovation, privacy protection, and security. I'm wondering if you can sort of play forward your vision for what the Ethereum ecosystem looks like in one year, 3 years, 5 years out. If you were to play these values forward, could you

paint us a picture of of how you see the Ethereum ecosystem evolving from here? Yeah, sure. Taking taking all those aspects into account. So, so that the three things that we talked about. So scaling at one means that uh this year we want to have 100 million uh gas per sorry per block on Ethereum one. Uh next year I want to have 300 million gas per block on the one and then probably two three years from now we start hitting with like the generational innovation around the one that will allow us to go further 3x a year or even 10x some acceleration. So this probably will be uh related to the fast majoring ZKVM solutions or some other innovation that

probably will be also driven by the accelerated research with with modern tools. So, so this is a one scaling L1 and what we'll what it will enable it will be practically I expect that uh in the in the long term whatever we do with L1 it will always operate at the target uh target block size which means that that block space will be used that the value of Ethereum that it's now like increasing with the adoption of like adoption in institutions uh by institutions in financial markets by adoption on identity systems probably return of NFTs in the format of like some very very advanced next generation metaverse for example like new new forms of art all of this will always keep the

Ethereum at target in the long term like you might have this like short-term volatility some some kind of temporary doubt of the of the ecosystem about like is is L1 growing in the future to support everything that we plan to grow on L2s now coming back to uh scaling blobs right so why we say scaling blobs and not scaling L2 because I think Our responsibility at the foundation and by the Cardiff ecosystem is to make L1 the like dolly fantastic best platform for L2s to use to scale. So it's it's really their responsibility to scale tools and very often they'll just borrow the scaling ideas that we deliver for L1.

It's it's very often the same client, same EVM, same ideas. So so they they have it for free. So we innovate by scaling the one, we innovate for L2s as well. where we scale blobs. You say we give you the space to use to to borrow security to use the interrop to to get the network effects to to use a one but it's your responsibility to scale to generate adoption to to market it uh to distributive uh to build this interrupt ecosystem. Now this means that in a year we would like the L2s to operate with tens or hundreds of millions of users.

We would like to see like 1000x explosion of the stable coins usage of real world assets, tokenization solutions, uh the actual like identities on board uh with privacy secured. All of this happening on the L2s while L1 always always uh processing everything that's most valuable and like anchoring the value like through minting the tokens on a one before moving them out L2 if this is of high value. And uh the third thing was interrupt and UX. So if we as we succeed with the L2 Z1 scaling then all of this is just it will be a nightmare if we don't solve the problem of the of the interrupt that it feels

like one ecosystem because we'll still have this we would have this tension uh that that maybe something doesn't look good in the wallet that might be it doesn't really feel like one chain and and this is part of the very important marketing message that it is Ethereum ecosystem it is network effects it is security that is shared that is produced from L1 that anyone here who comes to this ecosystem always benefits from L1. So and and this is this is like enough of the like the three things to focus on that is extremely challenging but I I think we have extremely talented people on the research sites on the engineering side in it and as not not only quality but also numbers and um there's like

number of independent organizations that that improve develop L2s L1 execution clients sure there's also complian there's too many of them um but uh continuously we benefit from That's like if we if you show that we can ship uh improvements every six months then I think we'll stop hearing that uh there's something wrong with awkward apps. So uh we have to show that like and this is this not a problem with just too many clients. It's just that we really failed for a while with coordination and it's it's more of the operational side uh structure of ACT that we already addressing. uh team posted uh blog posts and proposals on on what to fix and general the the willingness to win is is just fixing all

of this. I I think it's interesting that the three major directives are very much at the protocol layer sort of the infrastructure layer. How do you see the app layer co-evolving as y'all are shipping upgrades to the infrastructure layer every six months? Sure. I think that uh the first of all we think that Ethereum foundation uh really has to show that it takes care of the protocol uh and why for the protocol because whenever I was thinking about what apps need the most probably this is it like the really good UX the scaling and the expectation like they this very lots of confidence that everything will be good with the protocol so they they can very safely choose Ethereum ecosystem to

build on right so if you If you sort it, this is super important. Now, if you sort it in a way that you that you don't listen to the apps and start doing something with the protocol that they don't need that they will not use, then it's a problem. So, refocusing protocol changes like if you like scaling a one apps, apps want it because it also delivers the scaling of L2s, scaling blobs like the scale, the transaction cost and interoper UX. It says yeah, this is the best ecosystem to build on. Now we also rebuilding in the Ethereum foundation the echo like ecosystem development cluster. Uh so so we we do a bit of restructuring thinking that also the function of that ecosystem development uh cluster has to be uh has

to be related to those three goals. uh but focused on on the developers, founders, builders uh going through through the path. It's like from from being interested in interum protocol all the way to deploying apps and succeeding there and then we start tracking it by like measuring results, tracking quarter and quarter the improvement and before we build that machinery there might be some time hopefully compress it to two weeks. If you're enjoying this episode please check out the remainder of the episode on the feed hosted at all. capital. You must be a all Alo.

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