\n
![](\"https:\/\/bitcoinmagazine.com\/.image\/c_fit%2Ch_800%2Cw_1200\/MjA3NDUzMzMzODU2NzI0MjUz\/default_the_day_after_a_frat_house_party_house_with_wear_and_t_0.jpg\")
<\/p>\n
\n<\/p>\n
If you haven\u2019t been around too long, it\u2019s hard to fully appreciate how quickly narratives can shift in this industry, especially when playing catch-up. Fads grow old, memes become tired. It’s fair to say that this year\u2019s seasonal craze is currently feeling the pressure of Bitcoin\u2019s fading momentum. <\/p>\n
While it could be easy to write it off as a temporary setback caused by the usual bull market correction, strong underlying currents are working against popular scaling narratives. As this tide is going out, it\u2019s become a little hard to ignore those out there swimming naked. <\/p>\n
If it wasn\u2019t clear already, the recent crop of projects proposing to \u201cbuild on Bitcoin\u201d has so far been more about opportunism than innovation. Yes, BitVM and ordinals sparked genuine interest and creativity but the follow-through leaves a lot to be desired. This has been caused, in large part, by lazy operators. In lieu of doing actual engineering work, every other third-rate entrepreneur in the industry simply took the Ethereum playbook and ran with it on Bitcoin.<\/p>\n
I made a case<\/a> in my last article for why this modular cottage industry has left Ethereum worse for wear from a scaling standpoint but recent developments have highlighted just how misaligned the economic incentives are. <\/p>\n Of course, the impediment to this infrastructure arms race has been the ability of its promoters to print tokens like it\u2019s going out of style. Unfortunately for them, it does look like the trend is beginning to buckle on those schemes. You might remember how everyone eventually pivoted away from ICOs after Dentacoin raised billions of dollars. Something similar is playing out as we speak. <\/p>\n Just a couple of months ago, I explained<\/a> how the notion of points had conquered the token airdrop meta. Alternative execution layers were popping out left and right, advertising the opportunity to collect eventual rewards in exchange for liquidity on their networks. The premise was simple enough: users would be incentivized to use applications on a given rollup or contribute assets to its trading pools. Once the chain would launch, tokens would be allocated to a semi-random set of qualified participants. The idea was that this would further align them with the protocol and its future. <\/p>\n It turns out the exact opposite is playing out. Over the last week, a couple of heavily anticipated token airdrops shined light on the absurdity of the method. <\/p>\n How do you verify the identity of a user in a pseudonymous system? You can\u2019t. The inability to do so creates an opportunity for any capable actor to impersonate any number of users. Unsurprisingly, well-capitalized actors quickly caught on to the trick<\/a> and have been very busy exploiting it to their benefit. Instead of users, airdrops have attracted mercenaries who are pillaging every new layer they can get their wallets on. <\/p>\n You might be wondering why I\u2019m writing about tokens in a Bitcoin article. Consider it only a reminder that any Bitcoin scaling proposal or layer that involves a token should be avoided at all costs. Putting aside the fraudulent nature of the assets, this playbook is a telltale sign of projects that are behind the curve, even by Ethereum standards. I don\u2019t care what technology they claim to work on nor should you care about their execution environment or zero-knowledge proof. The window is closing in on them and we can expect them to shortchange their \u201cusers\u201d at every turn to profit from whatever liquidity this racket has left. Stay away.<\/p>\n The Bitcoinlayers<\/a> platform reported yesterday that more than half of current scaling proposals for Bitcoin were planning on using Ethereum\u2019s EVM as a technology platform. I do not know what to make of this number. It\u2019s probably generous to associate any of those with Bitcoin but the market is clearly interested in exploring this idea.<\/p>\n This is especially telling considering the volatile state of Ethereum at the moment. Don\u2019t call it a civil war yet but some battle lines are being drawn and the outcome will be telling for its rollup-centric roadmap. I previously laid out the case for Ethereum\u2019s network fragmentation<\/a>. Suffice it to say that things are escalating quickly and the project is again facing serious debates and introspection. <\/p>\n On one hand, a cohort of developers are advocating for the enshrinement of rollup operations<\/a> into the protocol to consolidate economic activity and improve user experience<\/a>. Another group is raising questions<\/a> about the initiative claiming it would further centralize MEV extraction<\/a> and affect censorship resistance. It\u2019s increasingly looking like Vitalik might need to pull another rabbit out of his hat.<\/p>\nEthereum\u2019s identity crisis<\/h3>\n