Concerns about the decline in the price of ETH and future outlook: Over the past two years, everyone is well aware that ETH will be scaled through L2, aiming to become the settlement layer of a modular L2 in the near future. The consequences of this roadmap are expected to lead to a decrease in gas usage for Dapps on ETH L1, resulting in a reduction in token burn, which means ETH is likely to become an inflationary asset once again. Now, after the announcement from Unichain, we have suddenly realized that the price trend of ETH may have come to an end. The new low of ETH/BTC adding extra factors for speculators has put those holding ETH in a state of significant self-doubt.

Check the burn data: DeFi applications account for 34% of the supply burned, while ETH transfers account for 7%.

The market now speculates that the burn share of DeFi and ETH transfers may further decrease, but the burn share of L2 may increase at the same time. Currently, the utilization of L2 accounts for about 4% of the burn rate. As the scale of the L2 ecosystem on ETH expands (with usage potentially increasing by 10 times), the burn rate could also increase.

In the next 2-3 years, the burn rate of L2 may exceed 30%, while the burn rate of DeFi may drop to 4% or lower, which may bring the burn rate back to a similar level. As long as the inflation rate of ETH remains below the PoW inflation rate (around 3.6%), it remains controllable; our current inflation rate is 0.5%, still much lower than Bitcoin's supply inflation. The main argument against ETH is its lack of fixed supply, as it is demand-driven. So, believe in demand and understand its constantly changing nature: ETH is evolving towards a settlement layer, with two key indicators being the gas consumption of L2 and the amount of tokens staked monthly compared to new token issuance. Over the past three months, approximately 2 million new ETH have been staked, with 4.8 million ETH burned for every 8 million ETH issued, meaning approximately 25% of the new supply is staked, while about 60% of the supply is burned.

To maintain a balanced state, if we see a decrease in burn rate, we should see an increase in staking rate, and as long as the ETH staking yield remains attractive, the staking rate will grow. Inputs like EigenLayer AVS and its potential returns, along with institutional interest surrounding ETH staking, may drive trading activity here. ETH dominates the majority of stablecoin trading volume, eventually transitioning to L2. All these changes will affect the cost of settling transactions in ETH on L2, leading to burns on the L2 side while reducing burns in the ETH L1 application ecosystem.

Overall, the fundamental development of Ethereum is still favorable, but sentiment has plummeted, which is why we are hearing the following voices:

- L2 is parasitic on L1 - L1 cannot expand - Vitalik is not a good leader - We don't need more L2

- The foundation sells a large amount of ETH every month - The roadmap deviates off track - No one knows how to evaluate ETH - The future of Ethereum is Coinbase - SOL will surpass ETH

When consensus undergoes drastic fluctuations in a certain aspect, taking a contrarian position is usually the best course of action. So now is the time to be bullish eth, assets, and l2s, which is a reasonable step to expand the ethereum ecosystem. I am not a fervent fan of Ethereum, and never will be. However, when you see such emotions, you must consider the other side of the bet. Get ready for a detestable rebound. What other aspects of the Ethereum ETH ecosystem are worth considering?

Leading public chain sector: ETH, the king of public chains, with the potential token SOL in the same sector. Leading blockchain game sector: AXS, the pioneer of creating mythological old games, with the potential token YGG, a game guild. Leading WEB3 sector: No leader identified, personal opinion MASK, a gateway from Web2 to Web3 sectors, strong background, high identity, small market cap, GAL, a web3 traffic publicity platform, a traffic entry, strong prospects and background. AI sector leader: No apparent leader, future leader might be FET, AGIX, combined into one ASI. They are also one of the benchmarks for the future AI sector, with strong potential for the entire sector. Because the sector emerged early in this bull market cycle and has high popularity, this sector may trigger a general outbreak in this bull market. Leading DEFI sector: UNI, the leader of the decentralized sector, the catalyst for the outbreak of the sector in the last season, can focus on DYDX, the second in the decentralized sector. Currently, UNI continues to hit new highs, while DYDX, after a long period of fundraising, has the opportunity for continuous outbreaks. Leading MEME sector: Veteran leader DOGE, currently with a very high market cap and scattered chips, affecting future potential, with potential token PEPE in the same sector, the top meme coin launched last year, with concentrated chips, high consensus, and great potential