On February 3, 2026, Vitalik published an important reflection on Ethereum's scaling roadmap on X. As the practical difficulty of Layer 2s evolving towards a fully decentralized form is being re-recognized, and the mainnet's own throughput capacity is expected to increase significantly in the coming years, the original assumption of "using L2 as the core vehicle for Ethereum scaling" is no longer valid. Ethereum's strategic focus is returning to the mainnet itself—through institutionalized scaling and protocol-native security mechanisms, strengthening its position as the world's most trusted settlement layer. Scaling is no longer the sole goal; security, neutrality, and predictability are once again becoming Ethereum's core assets.

Core Changes:

· Ethereum is entering an "L1 First Paradigm": With the mainnet scaling directly and fees continuing to decrease, the original assumption of relying on L2s to bear the core role of scaling is no longer valid.

· L2s are no longer "branded shards" but a trust spectrum: The decentralization of L2s is progressing much slower than expected, making it difficult to uniformly inherit Ethereum's security. Their role is being redefined as a spectrum of networks with different levels of trust.

· Ethereum's core value shifts from "traffic" to "settlement sovereignty": The value of ETH is no longer limited to Gas or Blob revenue, but lies in its institutional premium as the world's most secure EVM settlement layer and native monetary asset.

· Scaling strategy is adjusting towards protocol internalization: On the basis of continued direct L1 scaling, the exploration of native verification and security mechanisms at the protocol layer may reshape the security boundaries and value capture structure between L1 and L2.

· Valuation framework undergoes structural migration: The weight of security and institutional credibility increases significantly, while the weight of fee revenue and platform effects decreases. ETH's pricing is shifting from a cash flow model to an asset premium model.

This article will analyze the paradigm shift and valuation restructuring of Ethereum's pricing model through a layered approach of facts (technological and institutional changes that have occurred), mechanisms (impact on value capture and pricing logic), and projections (implications for allocation and risk-return).

Return to Origin: Ethereum's Values

Understanding Ethereum's long-term value lies not in short-term price fluctuations, but in its consistent design philosophy and value orientation.

· Credible Neutrality: Ethereum's core goal is not efficiency or profit maximization, but to become a credibly neutral infrastructure—rules are open, predictable, do not favor any participant, are not controlled by a single entity, and anyone can participate without permission. The security of ETH and its on-chain assets ultimately relies on the protocol itself, not any institutional credit.

· Ecosystem First, Not Revenue First: Ethereum's key upgrades consistently demonstrate a decision-making logic—actively sacrificing short-term protocol revenue in exchange for lower usage costs, a larger ecosystem scale, and stronger system resilience. Its goal is not to "collect tolls" but to become an irreplaceable neutral settlement and trust foundation for the digital economy.

· Decentralization as a Means: The mainnet focuses on the highest level of security and finality, while Layer 2 networks exist on a spectrum of connectivity to the mainnet with varying degrees: some inherit the mainnet's security and pursue efficiency, others position their value through differentiated functions. This enables the system to serve both global settlement and high-performance applications simultaneously, rather than being L2 "branded shards".

· Long-termist Technical Roadmap: Ethereum adheres to a slow and certain evolution path, prioritizing system security and credibility. From the PoS transition to subsequent scaling and confirmation mechanism optimizations, its roadmap pursues sustainable, verifiable, and irreversible correctness.

· Security Settlement Layer: Refers to the Ethereum mainnet providing irreversible finality services for Layer 2 and on-chain assets through decentralized validator nodes and consensus mechanisms.

This positioning of a Security Settlement Layer signifies the establishment of "settlement sovereignty", marking a transition from a "Confederation" to a "Federation" for Ethereum, a "Constitutional Moment" for the establishment of the Ethereum digital nation, and a crucial upgrade to Ethereum's architecture and core.

After the American Revolutionary War, under the Articles of Confederation, the 13 states were like a loose alliance, each printing its own currency and imposing tariffs on each other. Each state was free-riding: enjoying common defense but refusing to pay; enjoying the alliance's brand but acting independently. This structural problem led to reduced national credit and an inability to conduct unified foreign trade, severely hindering the economy.

1787 was America's "Constitutional Moment." The new Constitution granted the federal government three key powers: the power to levy taxes directly, the power to regulate interstate commerce, and the power to issue a unified currency. But what truly brought the federal government "to life" was Alexander Hamilton's economic plan of 1790: the federal assumption of state debts, redemption at face value to rebuild national credit, and the establishment of a national bank as the financial hub. A unified market unleashed economies of scale, national credit attracted more capital, and infrastructure construction gained financing capabilities. The US transformed from 13 small states guarding against each other into the world's largest economy.

Today, the Ethereum ecosystem faces an identical structural dilemma.

Each L2 is like a "sovereign state," with its own user base, liquidity pools, and governance token. Liquidity is fragmented, cross-L2 interaction friction is high, and L2s enjoy Ethereum's security layer and brand but cannot feed value back to L1. It is short-term rational for each L2 to lock liquidity on its own chain, but when all L2s do this, the Ethereum ecosystem's core competitive advantage is lost.

The roadmap Ethereum is now advancing is essentially its constitution-making and establishment of a central economic system, i.e., establishing "settlement sovereignty":

· Native Rollup Precompile = Federal Constitution. L2s can freely build differentiated functions outside the EVM, while the EVM part can obtain Ethereum-level security verification through native precompiles. Not integrating is an option, but the cost is losing trustless interoperability with the Ethereum ecosystem.

· Synchronous Composability = Unified Market. Through mechanisms like native rollup precompiles, trustless interoperability and synchronous composability between L2s, and between L2s and L1, are becoming possible. This directly eliminates "interstate trade barriers"; liquidity is no longer trapped on isolated islands.

· L1 Value Capture Rebuild = Federal Taxation Power. When all critical cross-L2 interactions return to L1 for settlement, ETH once again becomes the settlement hub and trust anchor for the entire ecosystem. Whoever controls the settlement layer captures the value.

Ethereum is using a unified settlement and verification system to transform the fragmented L2 ecosystem into an irreplaceable "digital nation". This is a historical inevitability. Of course, the transition process may be slow, but history tells us that once this transition is complete, the unleashed network effects will far exceed the linear growth of the fragmented era. The US used a unified economic system to turn 13 small states into the world's largest economy. Ethereum will also transform the loose L2 ecosystem into the largest security settlement layer, and even a global financial carrier.

▲ Ethereum Core Upgrade Roadmap and Valuation Impact (2025-2026)

Valuation Misconception: Why Ethereum Should Not Be Viewed as a "Tech Company"

Applying traditional corporate valuation models (P/E, DCF, EV/EBITDA) to Ethereum is essentially a category error. Ethereum is not a company aiming for profit maximization but an open digital economic infrastructure. Companies pursue shareholder value maximization, while Ethereum pursues ecosystem scale, security, and censorship resistance maximization. To achieve this goal, Ethereum has repeatedly actively reduced protocol revenue (e.g., through EIP-4844 introducing Blob DA, structurally lowering L2 data publishing costs, and suppressing L1 fee income from rollup data)—akin to "revenue self-destruction" from a corporate perspective, but from an infrastructure perspective, it is sacrificing short-term fees for long-term neutrality premium and network effects.

A more reasonable understanding framework is to view Ethereum as a globally neutral settlement and consensus layer: providing security, finality, and trusted coordination for the digital economy. The value of ETH is reflected in multiple structural demands—the rigid demand for final settlement, the scale of on-chain finance and stablecoins, the impact of staking and burn mechanisms on supply, and the long-term, sticky capital brought by institutional-level adoption such as ETFs, corporate treasuries, and RWA.

Paradigm Restructuring: Finding Pricing Anchors Beyond Cash Flow

In late 2025, the Hashed team launched ethval.com, providing a detailed, reproducible quantitative model suite for Ethereum. However, traditional static models struggle to capture the dramatic narrative shift of Ethereum in 2026. Therefore, we reused its systematic, transparent, and reproducible underlying models (covering yield, monetary, network effect, and supply structure) and reshaped the valuation architecture and weighting logic:

1. Structural Restructuring: Map the models to the four value quadrants of "Security, Monetary, Platform, Revenue" and price by category summation.

2. Weight Rebalancing: Significantly increase the weight of security and settlement premium, weakening the marginal contribution of protocol revenue and L2 expansion.

3. Risk Control Overlay: Introduce a macro and on-chain risk-aware circuit breaker mechanism, enabling the valuation framework to adapt across cycles.

4. Eliminate "Circular Reasoning": Models containing current price inputs (e.g., Staking Scarcity, Liquidity Premium) are no longer used as fair value anchors, retained only as indicators for position and risk preference adjustment.

Note: The following models are not for precise point prediction but for depicting the relative pricing direction of different value sources across different cycles.

Security Settlement Layer: Core Value Anchor (45%, Upweighted in Risk-Off Periods)

We consider the Security Settlement Layer as Ethereum's most core value source, assigning it a baseline weight of 45%; this weight is further increased during periods of rising macro uncertainty or falling risk appetite. This judgment stems from Vitalik's latest definition of "truly scaling Ethereum": the essence of scaling is not increasing TPS, but creating block space fully backed by Ethereum itself. Any high-performance execution environment relying on external trust assumptions does not constitute an extension of the Ethereum本体 (本体 -本体).

Under this framework, the value of ETH primarily manifests as the credit premium of a global sovereignless settlement layer, not protocol revenue. This premium is supported by structural factors such as validator scale and decentralization, long-term security record, institutional adoption, clarity of compliance path, and protocol-native Rollup verification mechanisms.

For specific pricing, we mainly use two complementary methods: Validator Economics (Yield Equilibrium Mapping) and Staking DCF (Perpetual Staking Discounted Cash Flow), jointly depicting the institutional premium of ETH as a "global security settlement layer".

· Validator Economics (Yield Equilibrium Pricing): Based on the ratio of annualized staking cash flow per ETH to the target real yield, deriving a theoretical fair price:

Fair Price = (Annual Staking Cash Flow per ETH) / Target Real Yield

This expression is used to depict the equilibrium relationship between yield and price, serving as a directional relative valuation tool, not an independent pricing model.

· Staking DCF (Perpetual Staking Discounted Cash Flow): Treating ETH as a long-term asset that can sustainably generate real staking yield, discounting its cash flow in perpetuity:

M_staking = Total Real Staking Cash Flow / (Discount Rate − Longterm Growth Rate)

ETH Price (staking) = M_staking / Circulating Supply

Essentially, this value layer is not对标 (对标 -对标) the revenue capability of platform companies but is similar to the settlement credit of a global clearing network.

Monetary属性 (属性 -属性): Settlement and Collateral (35%, Dominant in Utility Expansion Periods)

We consider the Monetary属性 (属性 -属性) as Ethereum's second core value source, assigning it a baseline weight of 35%, becoming the primary utility anchor during neutral markets or on-chain economic expansion phases. This judgment is not based on the narrative "ETH equals the USD," but lies in its structural role as the native settlement fuel and ultimate collateral asset of the on-chain financial system. The security of stablecoin circulation, DeFi liquidation, and RWA settlement all rely on the settlement layer supported by ETH.

For pricing, we use an extended form of the Quantity Theory of Money (MV = PQ), but model the usage scenarios of ETH in layers to address the order-of-magnitude differences in velocity across different scenarios Layered Monetary Demand Model:

High-Frequency Settlement Layer (Gas payment, stablecoin transfers)

· M_transaction = Annual Transaction Settlement Volume / V_high

· V_high ≈ 15-25 (referencing historical on-chain data)

Medium-Frequency Financial Layer (DeFi interactions, lending liquidations)

· M_defi = Annual DeFi Settlement Volume / V_medium

· V_medium ≈ 3-8 (based on capital turnover rates of major DeFi protocols)

Low-Frequency Collateral Layer (Staking, restaking, long-term locking)

· M_collateral = Total ETH Collateral Value × (1 + Liquidity Premium)

· Liquidity Premium = 10-30% (reflecting compensation for liquidity sacrifice)

Platform / Network Effects: Growth Option (10%, Bull Market Amplifier)

Platform and network effects are treated as growth options in Ethereum's valuation, assigned only a 10% weight, used to explain the non-linear premium brought by ecosystem expansion during bull phases. We use a trust-adjusted Metcalfe's Law model, avoiding equally weighting L2 assets of different security levels into the valuation:

· Metcalfe's Law Model: M_network = a × (Active Users)^b + m × Σ (L2 TVL_i × TrustScore_i)

· Platform/Network Effect Valuation Price: ETH Price(network) = M_network / Circulating Supply

Revenue Asset: Cash Flow Floor (10%, Bear Market Support)

We treat protocol revenue as the cash flow floor in Ethereum's valuation system, not a growth engine, also assigned a 10% weight. This layer primarily functions during bear markets or extreme risk phases, used to depict the valuation下限 (下限 -下限).

Gas and Blob fees cover the network's minimum operating costs and influence the supply structure through EIP-1559. For valuation, we use Price-to-Sales and Fee Yield models, taking the conservative value among them, only as a bottom reference. As the mainnet continues to scale, the importance of protocol revenue declines relatively, its core role reflected in the safety margin during downturns.

· Price-to-Sales Model (P/S Floor): M_PS = Annual Protocol Revenue × P/S_multiple

· P/S Valuation Price: ETH Price (PS) = M_PS / Circulating Supply

· Fee Yield Model: M_Yield = Annual Protocol Revenue / Target Fee Yield

· Fee Yield Valuation Price: ETH Price(Yield) = M_Yield / Circulating Supply

· Cash Flow Floor Pricing (take the minimum of both): P_Revenue_Floor = min(P_PS , P_Yield)

Dynamic Calibration: Macro Constraints and Cycle Adaptation

If the previous section established Ethereum's "intrinsic value center," this chapter introduces an "external environment adaptation system" independent of fundamentals. Valuation cannot operate in a vacuum; it must be constrained by the macro environment (cost of capital), market structure (relative strength), and on-chain sentiment (crowding). Based on this, we constructed a State Adaptation (Regime Adaptation) mechanism, dynamically adjusting valuation weights across different cycles—releasing option premium in宽松期 (宽松期 -宽松期), retreating to the revenue floor in避险期 (避险期 -避险期)—thus achieving the leap from static models to dynamic strategies. (Note: Limited by space, this article presents the core logical framework of this mechanism.)

Conditional Path for the Institutionalization Second Curve

The previous analysis was based on the internal technical, valuation, and cyclical logic of the crypto system. This chapter discusses a different level of problem: When ETH is no longer priced only by crypto-native capital but is gradually incorporated into the traditional financial system, how will its pricing power, asset attributes, and risk structure change? The institutionalization second curve is not an extension of existing logic but a redefinition of Ethereum by exogenous forces:

· Change in Asset Attributes (Beta → Carry): Spot ETH ETFs solve compliance and custody issues, essentially still price exposure; whereas the future advancement of Staking ETFs introduces on-chain yield into the institutional system through compliant vehicles for the first time. ETH thus transitions from an "interest-free high-volatility asset" to a "configurable asset with predictable yield." Potential buyers expand from trading capital to yield- and duration-sensitive pensions, insurance, and long-term accounts.

· Change in Usage Mode (Holding → Using): If institutions no longer see ETH merely as a tradable asset but start using it as settlement and collateral infrastructure. Whether it's JPMorgan's tokenized funds or the deployment of compliant stablecoins and RWA on Ethereum, it indicates that the demand for ETH is shifting from "holding demand" to "operational demand"—institutions not only hold ETH but also use it to complete settlement, clearing, and risk management.

· Change in Tail Risk (Uncertainty → Pricing): As stablecoin regulatory frameworks (e.g., the GENIUS Act) are gradually established in the future, and Ethereum's roadmap and governance transparency improve, the regulatory and technical uncertainties most sensitive to institutions are being systematically compressed, meaning uncertainty begins to be priced, not avoided.

The so-called "institutionalization second curve" is a change in the nature of demand, providing a real source of demand for the "Security Settlement Layer + Monetary Attributes" valuation logic, pushing ETH from an emotion-driven speculative asset to a foundational asset that simultaneously carries allocative and functional demand.

Conclusion: Value Anchoring in the Darkest Hour

Over the past week, the industry experienced a severe deleveraging洗礼 (洗礼 -洗礼), market sentiment hit rock bottom—this is undoubtedly a "darkest hour" for the crypto world. Pessimism spreads among practitioners, and as the asset that best represents the crypto spirit, Ethereum is also at the eye of the controversy storm.

However, as rational observers, we need to see through the fog of panic: What Ethereum is experiencing is not a "collapse of value" but a profound "migration of the pricing anchor." With L1 scaling advancing directly, L2s being redefined as a spectrum of networks with varying trust levels, and protocol revenue actively yielding to system security and neutrality, ETH's pricing logic has structurally shifted towards "Security Settlement Layer + Native Monetary Attributes".

Against the backdrop of high macro real interest rates,尚未宽松 (尚未宽松 -尚未宽松) liquidity, and on-chain growth options not yet allowed to be priced by the market, ETH's price naturally converges to the structural value range supported by settlement certainty, verifiable yield, and institutional consensus. This range is not an emotional bottom but the value center after剥离 (剥离 -剥离) platform-type growth premium.

As long-term builders of the Ethereum ecosystem, we refuse to be "mindless ETH bulls". We hope to rigorously argue our predictions through a严谨 (严谨 -严谨) logical framework: only when macro liquidity, risk appetite, and network effects simultaneously meet the trigger conditions of the market state will higher valuations be重新计入 (重新计入 -重新计入) by the market.

Therefore, for long-term investors, the key question is no longer anxiously asking "Can Ethereum still rise?" but to清醒地认识到 (清醒地认识到 -清醒地认识到)—in the current environment, which layer of core value are we buying at "floor price"?