Vitalik's New Year Message: Ethereum Will Continue to Uphold Its Core Mission of Being the 'Open Internet Core Infrastructure' to Build Decentralized Applications

Blockchain in 2026: Trends, Challenges, and Investment Outlook

Ethereum founder Vitalik Buterin has reaffirmed the network's commitment to serving as the 'open internet core infrastructure' in 2026, emphasizing continued development of decentralized applications. This message comes amid evolving challenges for the network's economic model, as Layer-2 solutions increasingly absorb transaction activity and fee revenue. Recent data shows Ethereum lost over $100 million in fees in 2025, with the collapse of rent paid by Layer-2 networks as a primary factor according to Cryptoslate.

The Dencun upgrade, implemented in 2024, significantly reduced transaction costs but also weakened deflationary pressure on the ETH supply. As a result, Ethereum's inflation rate rose by 0.204% since the Merge event in 2022. Meanwhile, Layer-2 operators like Coinbase's Base network captured nearly 60% of sector revenue in 2025, raising concerns about value concentration within the ecosystem.

New DeFi projects are emerging to address gaps in blockchain-based financial infrastructure. Mutuum Finance (MUTM) has finalized its core lending features and is preparing for its V1 launch on the Sepolia testnet. The platform aims to provide structured lending markets that function across different market conditions and supports overcollateralization to manage risk according to Global Newswire.

Simultaneously, Moto Finance Inc. has raised $1.8 million in pre-seed funding to develop a blockchain-powered credit card and savings account platform. The startup plans to integrate decentralized finance (DeFi) protocols to generate yields for users while offering premium lifestyle benefits and cashback rewards according to Global Newswire.

Why Did Ethereum's Economic Model Shift?

Ethereum's shift toward lower fees was driven by the need to scale and reduce user costs. However, this transition has had unintended consequences for network revenue. In 2024, Layer-2 networks generated $277 million in total revenue, with 41% paid to the Ethereum mainnet. By 2025, this figure had dropped to less than 10% as Layer-2 operators retained more profits for themselves.

The decline in fee revenue has also affected Ethereum's price performance. ETH is down 10% year-to-date in 2026, while its ratio against Bitcoin has fallen 6%. This divergence highlights a broader structural issue in the Ethereum ecosystem, where network utility and token value are becoming increasingly decoupled according to Cryptoslate.

What Trends Are Shaping Blockchain in 2026?

Blockchain technology is maturing and expanding beyond cryptocurrency. Modular blockchain architectures, zero-knowledge proofs, and real-world asset (RWA) tokenization are shaping the next phase of development. For instance, Celestia and Polygon 2.0 have introduced modular designs that enable customizable and efficient networks. ZKPs are also gaining traction, with platforms like zkSync Era and Starknet processing real transaction volume on Ethereum.

Meanwhile, RWA tokenization is connecting blockchain with traditional markets. Tokenized real-world assets, such as treasuries and commodities, are enhancing liquidity and transparency. BlackRock's BUIDL Fund raised over $240 million by tokenizing U.S. treasuries, while HSBC and Hong Kong authorities have launched initiatives for tokenized gold and green bonds according to Binariks.

What Are Investors Watching in 2026?

Investor interest in crypto ETFs continues to grow, with U.S. spot crypto ETFs attracting $32 billion in inflows in 2025. Despite recent pullbacks, BlackRock's iShares Ethereum Trust (ETHA) remains the largest ETF, with inflows reaching $12.6 billion. Industry analysts predict a surge in new ETPs in 2026 under the SEC's revised listing standards, though many may struggle with demand according to Cointelegraph.

Meanwhile, blockchain-based financial products are gaining traction. Moto Finance's tiered savings and rewards program offers users up to 5% interest on deposits and 5% cashback on card purchases, positioning it as an alternative to traditional banks according to Global Newswire. Similarly, Sharplink Gaming's Q3 2025 revenue reached $10.8 million, a tenfold increase year-over-year, driven by gains from Ethereum holdings.

Overall, Ethereum's core mission remains intact despite evolving economic dynamics. While challenges persist in aligning network utility with token value, new DeFi and blockchain projects are pushing the boundaries of decentralized finance and infrastructure.