Cardano Founder Charles Hoskinson Predicts Ethereum's Downfall
Cardano founder Charles Hoskinson has issued a stark warning regarding Ethereum's long-term viability, asserting that the network's increasing reliance on rollups and external scaling solutions is creating economic incentives that will inevitably "hollow out" its base layer. In a recent CoinDesk interview, Hoskinson acknowledged Ethereum's technical advancements but contended that its current architectural path fosters an ecosystem destined to "slowly but surely eat [it] alive."
The Layer-2 Paradox and Looming External Pressures
Hoskinson frames the core issue as a misalignment of incentives, arguing that Layer-2 (L2) teams "don't particularly care if they're attached to Solana or they become a Layer one." This flexibility means L2s could easily migrate or evolve into independent Layer-1s if better economic opportunities or user growth emerge elsewhere, thereby eroding Ethereum's foundational network effects. This internal pressure is compounded by two significant external forces. First, Hoskinson identifies Bitcoin DeFi as a "sleeping giant," poised to attract "hundreds of billions" in total value locked if it successfully develops robust primitives like stablecoins, DEXs, and lending with strong security. Such a shift could see Bitcoin's Total Value Locked (TVL) surpass Ethereum's market cap, drawing in sovereign wealth and major asset managers. Second, he anticipates that major technology platforms (e.g., Microsoft, Google, Amazon) and traditional financial institutions will opt to build their own bespoke infrastructure adjacent to public chains, rather than becoming economically dependent on or boosting Ethereum's base layer.
The Technological Shift and Ethereum's Future
The broader technological landscape, particularly the maturation of zero-knowledge proofs and "proof-carrying code," further supports Hoskinson's thesis. These advancements enable more computation to be executed off-chain in secure environments, with only succinct proofs submitted to the main chain for verification. This innovation, he posits, questions the rationale behind maintaining a "very weak computer that's shared and replicated" (Ethereum L1) when distributed, off-chain computation becomes increasingly efficient and verifiable. While crediting Ethereum for its "incredible" achievements, including navigating early funding scares and the DAO crisis, Hoskinson suggests that Ethereum may ultimately need to "pivot to a new McGuffin" to retain its relevance, even if it remains a component within the broader blockchain stack. His skepticism is not about Ethereum's technical capability but its fundamental economic structure, where the success of L2s ironically diminishes the L1's appeal as the central economic hub.
