Vitalik Discusses Ethereum Scaling Path, Circle Announces Partnership with Polymarket, What's the Overseas Crypto Community Talking About Today?
Publication Date: February 6, 2025
Author: BlockBeats Editorial Team
Over the past 24 hours, the crypto market has shown a complex development trend in multiple dimensions. The mainstream discussion focused on market confidence decline, talent outflow, and narrative fatigue-driven outlook discussions. Meanwhile, the Bitcoin payment network faced an attack once again highlighting the risks of centralized infrastructure. In terms of ecosystem development, Ethereum continued to advance its technology roadmap around privacy and scalability, privacy-focused L2 narratives heated up, cross-chain settlement infrastructure received additional capital, and the underlying structure of on-chain financial applications is still evolving.
1. Mainstream Discussion
1. Crypto Market Outlook Discussion
The crypto market remains in a state of high uncertainty, with several industry insiders recently expressing concerns about the industry's outlook.
Balaji believes that despite intense short-term price fluctuations, in the long term, the crypto world will transition from being "rule-driven" to "code-driven," emphasizing the importance of internet capitalism and privacy. Altan Tutar listed a series of negative signals, including Kyle Samani of Multicoin exiting, Nader Dabit shifting to an AI startup, and Vitalik admitting that the Layer 2 roadmap has not been fully successful, pointing out that the industry seems to be losing a "common enemy" that can unite consensus.
Linda Xie revealed that many people she respects have advised her to leave the crypto industry and move to the AI or robotics track. Cami predicted that the market will experience severe turbulence in the next three months, with rational funds shifting to projects with sustainable cash flows or choosing to exit entirely, noting that three key figures have already exited in the past 48 hours.
Flood analyzed from a trading perspective, suggesting that this round of sell-off may involve sovereign wealth funds reducing their holdings, exchanges experiencing liquidations or high-leverage chain reactions. Ignas believes that crypto natives are actively selling off due to concerns about a "1929-style crash," forming an internal negative feedback loop. Miya even bluntly stated that "crypto is over," the VC system is slowly declining, LP commitments remain low, several institutions have shifted to the AI and robotics track, and called for attention to "valuable tokens" from Web2 startups. Arthur pointed out that this cycle is not friendly to long-term investors, but traders are making substantial profits; from a longer-term perspective, continued investor exits may lead to gradually depleting liquidity.
Community reactions are visibly divided. On one hand, many agree with the industry's weakness assessment. Raychi sarcastically remarked, "Price is irrelevant, but the portfolio has collapsed," AdimKarp questioned the accuracy of Balaji's past predictions, Anatoly Karlin warned that once the rule order collapses, what will be reinforced is state power rather than the crypto system. Bruno Skvorc criticized the industry for being filled with "junk projects" lacking true decentralization, calling for a stop to building meaningless L2 solutions. LilMoonLambo believes that crypto should maintain its countercultural nature rather than cater to mainstream politics.
On the other hand, there are also relatively positive voices. Mert supports the narrative of "Capitalism 2.0," while THORChain emphasizes that the real DEX demand still exists. Shamdoo and Mayhem question Samani's judgment, and Lily Liu suggests shifting the focus from the protocol layer to the application layer. Overall, the discussion focuses on talent drain, narrative fatigue, and opportunity cost; a few believe that "purging" may foster renewal, but the majority of sentiment still leans towards discouragement and exit.
2. Strike Bitcoin Payment Network Reportedly Subject to DDoS Attack
Strike founder Jack Mallers confirmed that the company's Bitcoin payment network experienced a DDoS attack, causing over 2.5 million global users to be unable to send or receive BTC for approximately 183 minutes. Simon Dixon cautioned users to avoid borrowing Bitcoin and hinted that the potential offline of some borrowing parties could pose liquidation risks. However, Mallers later clarified that no liquidations occurred during the incident.
The event sparked mockery of Bitcoin's "future financial infrastructure" reliability. Accredited Financial Survivor pointed out that the attack did not impact the Bitcoin protocol itself; John Tuld questioned whether the timing of the attack was meant to mask solvency issues. Victor Resto emphasized that centralized services are not the future, CalmTraders believed that Bitcoin is neither the future of finance nor capable of serving as a store of value.
Urban Arson criticized the Lightning Network as fundamentally an IOU network, Tyrannysaurusrekt and Paolo Aga took the opportunity to promote BCH as a true peer-to-peer cash solution. LC clarified that the issue lies with Lightning rather than Bitcoin itself and recommended Kaspa's "zero downtime" feature. RogeR suggested that the attack and market sell-off were synchronously timed, discussing an overall shift towards centralized risk exposure and alternative chain narratives.
3. Circle Announces Partnership with Polymarket
Circle announced a partnership with the world's largest prediction market, Polymarket, to drive the evolution of on-chain financial market infrastructure, focusing on stablecoin transparency, settlement reliability, and reducing friction costs. Polymarket will migrate from Polygon's bridged USDC (USDC.e) to Circle's native USDC, enabling 1:1 direct USD redemption, thereby enhancing capital efficiency, scalability, and system reliability.
The community's overall response has been positive. 0xWeiler emphasized the elimination of bridging risks, Peter Schroeder noted the symbolic significance of the partnership, Grazka and d1namit expressed excitement. Insight.eth viewed it as a significant signal of on-chain market maturity, Campbell inquired about its actual business impact, Buy The Dip Bro is optimistic about the potential boost to CRCL's stock price. ME Group further elaborated on the partnership details, KimcĦi called for support for USDC on Hedera, and LINK-BULL ennes pointed out that both are Chainlink ecosystem partners. The overall atmosphere is optimistic, but there are also a few voices expressing concerns about regulatory freeze risks.
4. Vitalik on Ethereum Scaling Pathway
Vitalik Buterin has released an article discussing the possibility of achieving a 1000x extension of Ethereum L1 through a "new form of state." He points out that while execution and data layer scaling are relatively feasible, state scaling is more challenging. He suggests introducing a new form of state that has lower costs but limited functionality while gently scaling the existing state. High-value objects (such as user accounts, DeFi contracts) should remain in the existing state tree, while ERC20 balances, NFTs, and the like can be migrated to the new state structure.
In further discussions, Vitalik criticizes the trend of excessive replication of EVM chains and L1, calling for true innovation in directions such as privacy, application-specific efficiency, and ultra-low latency. He emphasizes that the essence of being "connected to Ethereum" should align with the actual integration and advises against a one-size-fits-all L2 bridging approach. He proposes that applications like prediction markets may be better suited for an application chain architecture: issuance and settlement on L1 with transactions processed on a rollup-based system.
The discussion quickly heats up. Keone Hon suggests starting with database optimization and gas pricing mechanisms to incentivize state destruction. Poseidon believes that addressing price extension issues should take precedence, while Markus.ai and Kaspa Hub take the opportunity to promote ICP and Kaspa as alternative solutions. Observe sees Vitalik's statement as a bullish signal, and Quai Network promotes its own tree-chain structure.
Critical voices have also emerged, with Tony Montana accusing developers of token dumping. Binji interprets this as a manifestation of "trust gradient" and encourages more honest architecture choices. Miralib, Z, and others continue to emphasize that Kaspa and ICP have already achieved similar goals in practice. The overall discussion gradually evolves into a showcase of competitive public chains, reflecting both disappointment in Ethereum's limitations that have been publicly acknowledged and a lingering expectation of innovation space.
2. Mainstream Ecosystem Dynamics
1. Ethereum Privacy L2 Narrative Heating Up
Payy_link announced it will migrate from a standalone chain to an Ethereum-based privacy-focused L2, emphasizing a "privacy-first" banking-grade on-chain experience. The project has garnered support from Robot Ventures, 6th Man Ventures, dba_crypto, and Protocol Labs. It aims to build on-chain banking services with stablecoins at its core, allowing users to directly download and use the app.
David Hoffman highlights that this decision came just one day after Vitalik announced that rollups are no longer seen as a "centralizing stopgap solution," further showcasing Ethereum's strong network effects. Despite Vitalik's recent emphasis on the importance of L1 scaling, he also clearly states that L2 still holds irreplaceable value in specialized scenarios.
In addition to the Payy_link, privacy-focused L2 projects such as Aztec Network, Nillion, 0xMiden, COTI Network, and others are also making progress. At the same time, an institutional privacy working group is discussing the possibility of the banking system transitioning to the Ethereum L2, believing that "cryptographic privacy" is superior to traditional policy privacy in terms of mathematical verifiability. The Confidential Layer has already integrated Base, providing users with instant privacy access capabilities.
Furthermore, Vitalik has also released the Ethereum L1 privacy roadmap, covering on-chain payment privacy, partially anonymous application activity, RPC call privacy, and network layer anonymity, signaling Ethereum's systematic enhancement of privacy capabilities.
The community as a whole holds a highly positive view of Ethereum's progress in the privacy field. rip.eth believes that there is no need to build another privacy-focused alt-L1, as Ethereum is poised to become the infrastructure for "default privacy" and its scale is so large that it is difficult to completely block. Leo Lanza emphasizes that while L2 inherits L1 security, it also provides a practical path for institutions to adopt "mathematical privacy" rather than "policy privacy."
XT Exchange summarizes Vitalik's privacy roadmap, aiming to achieve default private transfers and resilience to threats. Master Mute predicts that privacy will become a long-term trend, but having too many independent privacy chains may not be necessary, as Ethereum may integrate privacy capabilities. mert analogizes privacy design with performance trade-offs to the route differences between SOL and ETH.
AminCad clarifies a misunderstanding of Vitalik's views, emphasizing that its core support remains for L2 specialization, with the future form being "one L1 (Ethereum) + multiple L2s." MIKS describes the current moment as "extremely unusual," while GPT360 believes that the Ethereum narrative still maintains resilience. Streamr highlights the importance of decentralized ordering to avoid censorship risks.
There have also been a few voices of skepticism, such as Brahddah.eth questioning Aztec's privacy depiction or taking the opportunity to promote competing chains like ICP. Overall, market sentiment leans towards optimism, suggesting that privacy L2 is strengthening the depth and applicability of the Ethereum ecosystem.
2. Relay Completes $17 Million Series B Funding
Relay Protocol has announced the completion of a $17 million Series B funding round led by Archetype and USV, and simultaneously launched the Relay Chain—a layer 2 infrastructure designed for "instant cross-chain settlement," supporting instant transfers of any asset on any chain.
So far, Relay has supported over 85 blockchains, processed over 100 million transactions, with a total transaction volume of $20 billion. The core focus of this round of funding is to address on-chain asset fragmentation, allowing users to complete asset transfers without perceiving inter-chain complexity.
Previously, Relay (formerly known as Reservoir) completed a $14 million Series A funding in February 2025, focusing on a unified cross-chain token trading experience. Similar projects in this direction include Analog, which raised $16 million in 2024, focusing on cross-chain communication infrastructure.
The community response has been enthusiastic. Leading products such as MoonPay, MetaMask, Phantom, among others, have congratulated the milestone, emphasizing its significance for cross-chain infrastructure. Max Segall and deployer have expressed a clear bullish sentiment.
crickhitchens has raised concerns about Relay's Data Availability (DA) choices and recommended Celestia as a potential solution. Anon Vee revisited their Series A coverage, stating that Relay's bridging solution is highly reliable. bigchops believes this is an "long-awaited but highly effective" announcement, ALVIN speculates that the cross-chain payment landscape may undergo significant changes as a result. Fundraising Digest has systematically organized the funding structure and background.
While the overall sentiment is leaning towards excitement, there have also been discussions focusing on technical details, such as DA scheme choices and long-term scalability. However, overall, Relay is widely seen as one of the key players addressing cross-chain fragmentation.
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