Ethereum Can Safeguard the Peg: Defense and Expansion Strategy Analysis Amid L1 Competition

The New Challenge: Who Really Are Our Competitors?

In today’s blockchain ecosystem, it’s not just about technology. The latest wave of L1 blockchains is driven by three critical elements absent in previous competitors: an established killer application in the form of stablecoins, a large existing user base from traditional finance, and a regulatory environment that is more accommodating than before.

This scenario is not new. When Libra (now Diem) was launched, it also had strong institutional backing and regulatory clarity that hadn’t been considered before. The problem was timing — too early, perceptions of centralization were high, and the industry wasn’t ready. Now, new entrants are learning from that experience.

The three types of institutional players have different advantages: tech companies bring cloud infrastructure, payment platforms bring legacy financial users, and existing stablecoin issuers have a distributed user network. So, this isn’t just a “faster blockchain” — it’s a financial system with a blockchain foundation.

Why Ethereum Isn’t as Low as Others Think

Many analysts worry that Ethereum will lose relevance. But the reality is more nuanced. An ecosystem’s dominance isn’t just about technological performance — it’s about trust, decentralization credibility, and ecosystem stickiness.

The Defense: Credible Neutrality and Entry Accessibility

First, Ethereum must continue to be a neutral platform. As large financial institutions enter blockchain, they don’t want to pay transaction fees for competitors. Ethereum’s deep decentralization and openness attract not only crypto-native users but also enterprises wary of vendor lock-in.

Second, Layer2 strategies must remain accessible. For institutions wanting to deploy their own chains but lacking resources, Ethereum L2 offers unmatched security and economic efficiency. The past two years have proven this — Coinbase, Robinhood, and many fintechs continue to choose L2 infrastructure.

The Real Battleground: Mainnet Scaling

Here’s the critical insight: the mainnet will no longer be just a settlement layer. Financial institutions explicitly want to conduct high-value transactions on the mainnet itself, not Layer2, because they prioritize maximum security. Yes, fees are higher — but it’s acceptable if security is assured.

Layer2 has successfully absorbed high-frequency, low-value volume. But the mainnet is no longer just competing with the gaming craze or NFT mania. New transactions involve high-value institutional transfers and smart contract interactions that require settlement certainty.

Concrete example: the World Liberty Financial unlocking event pushed gas prices to $20. This isn’t a network failure — it’s a signal of legitimate demand for mainnet capacity.

The Offensive Move: Scalability Roadmap

The Ethereum Foundation has released a clear roadmap at Devcon. The target is ambitious: support 10 billion users worldwide, 100 transactions per user per day, resulting in a daily capacity of 1 trillion transactions.

This isn’t just a number. The implicit message is: Ethereum will not stay in the status quo. Regular upgrades, community-driven improvements, and ongoing innovation are continuous. More importantly, the ecosystem has officially shifted focus — enterprise requirements are no longer “nice-to-have,” they are core considerations.

Who Is the Real Winner?

The competitive landscape isn’t zero-sum. The new L1 will bring technological progress to the industry — parallel competition drives innovation. But Ethereum has a structural advantage: once a platform reaches a mainstream adoption threshold, switching costs become prohibitive.

The combination of credible neutrality, Layer2 accessibility, and mainnet throughput expansion is the comprehensive answer to threats. Not just a defense — it’s a strategic offense covered by multiple layers of moats.

The lead isn’t lost because of better technology alone — it’s lost because of ecosystem lock-in, trust, and the ability to evolve faster than expected. Ethereum has demonstrated all three.