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No matter how bad your Monday blues are today, find comfort in the fact that it’s probably not as bad as Polygon’s, with Aave and Lido making plans to leave the sidechain. Today, we also look at how ETH ETFs are driving growth, and the toxicity of ETH-maximalism as a noteworthy concern of late.

ETH held via ETFs exceed L2 ETH holdings:

The percentage of ETH held via ETFs is surpassing all combined ETH held in L2 rollups for the first time. Of the ETF issuers, Grayscale maintains its lead at 56%, while BlackRock and Fidelity are second and third at 27% and 12%, respectively. For L2s, Arbitrum leads in ETH holdings at 32%, then Base at 32% and Optimism at 17%. For more, read Marc-Thomas Arjoon’s Blockworks Research’s report.

— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)

Eth’s culture problem

The Ethereum community is at a cultural crossroads as heated reactions to prominent contributor Max Resnick’s departure reveal deeper tensions around governance and dissent. Resnick’s critiques of Ethereum’s governance and scalability approach drew overwhelmingly negative reactions, including accusations of being a "Solana plant" and other ad hominem attacks. These responses highlight broader issues in Ethereum’s social layer and decision-making processes.

Maximalism in Ethereum

Ethereum maximalism has begun to mirror some of the less constructive traits of Bitcoin maximalism. Arguments abound that dissent is increasingly silenced, with critics labeled as outsiders or opponents. Resnick’s critiques, while highlighting real challenges, were met with hostility. His communication style, often perceived as antagonistic, alienated key contributors. Some in the community view his departure as a net positive, reinforcing shared values and emphasizing that dissent must be constructive to avoid divisiveness.

This dynamic isn’t unique to Resnick. Figures like Jon Charbonneau have also challenged the idea of decentralization as an abstract ideal, arguing it can stifle productive debate in practice. In his "Ethereum’s North Star" blog post, Charbonneau wrote, "If decentralization is the only goal, then why not decrease the block gas limit, lower the blob count and increase the slot times? Too often, shouting ‘aha that’s sacrificing decentralization!’ is just used to shut down fruitful debate."

Charbonneau emphasized the need for Ethereum to define its unique purpose. He urged the community to align on long-term principles and avoid decision-making driven by short-term dynamics.

The social layer: Strength or weakness?

Ethereum’s reliance on social consensus has long been celebrated as a decentralized alternative to formal governance. However, this approach has drawbacks. Decision-making often appears dominated by loud, influential voices on platforms like Twitter, even if Ethereum’s core development process operates transparently and engages diverse stakeholders.

Core developers follow a consensus-driven process, building in public to ensure decisions reflect broad input. This process resists formal capture, but risks stagnation if dissenting voices are excluded. Resnick contributed regularly to Eth Research, sharing insights on scalability and governance, but he did not participate in ACD calls or engage significantly on Ethereum Magicians.

Lessons from Bitcoin

Bitcoin’s rise, including its run to $100k, was not driven solely by maximalism. It stemmed from sustained advocacy efforts that engaged governments, institutions and the public to build a strong socioeconomic narrative. By contrast, Ethereum has largely avoided real-world advocacy, focusing instead on maintaining its decentralized ethos.

Ethereum’s future depends on balancing conviction and inclusivity. The community must recognize that technical progress alone is insufficient — a robust cultural foundation is equally critical. Purity tests and unchecked maximalism risk stifling innovation and debate, making it essential to introduce mechanisms that foster open dialogue without compromising decentralization.

Ethereum’s greatest strength lies in its adaptability. By addressing cultural challenges head-on, the community can retain valuable contributors and ensure Ethereum’s leadership as a decentralized, inclusive ecosystem.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley)

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SKALE, the gas-free invisible blockchain, is “Built Different” for mass adoption: high-throughput, scalable, and fair. As a network of interoperable EVM-compatible L1s, SKALE’s user experience focus has accelerated a strong ecosystem across gaming, AI, and more. Due to SKALE’s gas-free nature, blockchain can be integrated invisibly, creating accessible Web2-like experiences for users and developers.

SKALE has:

• Over 50M UAWs

• 9 Games on the Epic Games Store

• Saved Users over $9.5B on Gas Fees

Aave wants to break up with Polygon, while Lido already has.

Four days ago, a governance proposal floated the possibility of bridging $1.3 billion worth of idle stablecoins on the Polygon PoS bridge toward Aave’s lending competitor Morpho. The stablecoins would then be rehypothecated onto protocols like Sky, Angle and Robert Leshner’s Superstate.

This “Blast-like” strategy would unlock an estimated $70 million in annual yield for “ecosystem incentives” that Polygon is currently leaving on the sidewalk. 

I say Blast-like because unlike the Blast L2, Polygon users would actually have to trust a bridge, plus they wouldn’t benefit from any yield rewards (at least not directly).

In response, Aave-chan Initiative (ACI) founder Marc Zeller published seven hours ago a rather aggressive governance proposal seeking to adjust the risk parameters loan-to-value (LTV) for all assets on Aave Polygon, to 0%.

The reason for the breakup? Zeller cites reasons of risk involved with “bridge vulnerabilities,” invoking a list of historical bridge hacks such as Ronin, BNB bridge, Wormhole and more.

Zeller’s proposal would also adjust the reserve factor for all Aave assets to 85% to disincentivize deposits, cancel its upcoming Umbrella safety module deployment, migrate Aave’s v3 governance to another L2 chain, and freeze all its reserves on Polygon.

Above all, the proposal seeks to create a co-incentive program with other L2 chains, making it attractive for Aave users on Polygon to migrate liquidity elsewhere (perhaps the Avalanche C-Chain?).

Suffice to say, this would in effect kill the existence of Aave on Polygon, which is currently the top protocol by TVL ($662 million) on the sidechain.

From Aave’s perspective, Polygon’s revenues are pocket change. On a month-to-date basis, Polygon's revenues to Aave account for a mere 3.8% ($305k) of its total revenues.

The million-dollar question here is: How would Aave have responded had Polygon chosen to deploy its bridged stablecoins to aUSDC on Aave?

— Donovan Choy

Emerging technologies including AI and blockchain are set to transform society, but they often involve sensitive information. For these technologies to realize their full potential, private data sharing and privacy-preserving computation are essential prerequisites.

In the latest report from Blockworks Research, analyst Daniel Shapiro breaks down how emerging Privacy-Enhancing Technologies (PETs) could enable secure collaboration without compromising privacy, making it possible for individuals and organizations to leverage data across partners, users, and systems.