Ethereum Faces Decline, bApps Offer New Path for Growth

Ethereum, despite its leadership in total value locked (TVL), is facing significant challenges. Network activity is declining, and the momentum is waning. The ecosystem is in a critical state, and without meaningful changes, Ethereum risks becoming inaccessible to the builders and users it needs to thrive. The platform requires fresh ideas to bolster its ecosystem, unify it, and genuinely support innovation.

Enter based applications (bApps), which are any application or service that uses the Ethereum validator set for security. Inspired by the based movement, bApps enable any project to bootstrap directly from the Ethereum layer 1 (L1), facilitating interoperable, scalable, and cost-effective development. The recent decline in network activity underscores a deeper issue within Ethereum, primarily related to user experience (UX). The race to scale a blockchain isn't just about TVL and transactions per second (TPS); it's about the experience of users and developers who co-create the ecosystem. Ease of development and interoperable developer ecosystems and applications are paramount. Improving the developer experience is crucial for enhancing user experience, which drives adoption.

Currently, builders face two main options. The first, and more popular, is restaking, which has become the default mechanism for bootstrapping new services by locking up validators’ withdrawal keys or large amounts of capital for security. The alternative is self-bootstrapping, which involves building a validator set from scratch—a resource-heavy and technically complex process that often starts off centralized. Both choices are limiting for builders and do not solve the fragmentation problems currently plaguing Ethereum.

Validators are also affected by this system. In the current restaking setup, validators who want to earn more yield by supporting new services must restake, lock up their withdrawal keys, and take on additional risk. By locking up withdrawal keys to secure applications with slashable capital, validators are exposed to cascading risks, which, at scale, could affect Ethereum itself—a core departure from Ethereum’s founding vision.

bApps offer a third, more accessible option for self-bootstrapping and restaking. Using based security infrastructure drastically lowers entry barriers for any size protocol to build securely and sustainably, all while preserving the traditional network effects of Ethereum. Validators are incentivized to join through risk-free yield opportunities; developers can affordably access security to build; and users benefit from a unified and interoperable ecosystem.

Mission-critical services like rollups, bridges, and oracles don’t need to reinvent the wheel. They simply plug into an existing, trusted security model. Using Ethereum validators as a primary security base, any out-of-protocol service can inherit the Ethereum L1’s decentralization and Sybil resistance. This paradigm can be extended beyond Ethereum, enabling other L1 validators to secure bApps. This potentially turns bApps into a marketplace for multichain security, dramatically reducing the complexity (and cost) for developers and raising the bar for the entire ecosystem, offering a “based” path forward.

bApps empower validators to earn more with their existing stake. By primarily using the validator principle as non-slashable security, validators can opt into many services through their existing Ethereum validator role without needing to restake or supply extra stakes. This would encourage broader validator participation, especially from smaller or more risk-averse operators, which is excellent considering solo stakers are an important ecosystem pillar.

bApps also revolutionize Ethereum’s current bootstrapping ecosystem, which relies heavily on slashable capital. In restaking, one participant’s gain may directly correspond to another’s loss, creating a zero-sum model. Building a competitive dynamic where participants must add or reallocate resources instead of sharing them, consequently working against new entrants by creating competition for limited attention and resources.

The based economy, conversely, promotes an infinite-sum game, transforming competition for resources into a synergistic environment where new applications, services, and participants increase the overall value of the platform. Each new validator increases security for bApps, and each new bApp provides new opportunities for validators. This infinitely scalable model breaks free from the limitations of a zero-sum model, enabling seamless bootstrapping, rewarding innovation, and building more secure, inclusive, and resilient ecosystems.

For Ethereum to grow, fragmentation has to be addressed. Builders need building blocks, which need to be secure, low-cost, interoperable, and scalable. Think about what cloud computing did for Web2. BApps offer just that—by introducing an infinite-sum game, they unlock scalability and provide a safe and affordable way to bootstrap with Ethereum’s proof-of-stake network.

If Ethereum is to be the foundation of tomorrow’s decentralized world, it must empower the builders of today. The way forward is to solve Ethereum’s user and developer experience problem with a based infrastructure. Going based is the clear solution.