Ethereum is facing new scrutiny after the release of a highly critical report showing its poor position on the second largest cryptocurrency. the market capitalization. The report suggests that key aspects of the ETH ecosystem and long-term outlook may be weaker than widely believed, prompting the company to disclose that it has taken a short position against the asset.
Culper’s research describes the main risks of the Ethereum ecosystem
The investment research firm Culper Research has published a critical report in which it has taken a short position on Ethereum. The CEO of Coinbureau, Nic joint in X, the reporter noted that the structural changes after the ETH Fusaka upgrade significantly expanded the block space, resulting in a decrease in transaction fees, which is about 90%.
According to the company, lower payouts translate directly into lower validator revenue, leading to a weaker staking economy. Culper further notes BitMine and argues that the recent increase in transaction activity and active addresses listed as high-quality is due to spam transmissions and poisoning attacks on addresses rather than actual acceptance.
The company also informed about this Vitalik Buterin sold about 19,000 ETH as if he knew what was going on. Although this is a significant amount, representing about 8% of Buterin’s shares, it does not necessarily indicate an exit or loss of confidence.
At the same time, Nick noted that the design of ETH allows for future changes to the rules protocols through coordinated improvements or individuals in case of any economic problems. It will not be politically or technically easy, but it is possible. Nick emphasized that he does not support. However, when a company publishes a detailed prospectus and then puts up their money, they need to understand the mechanics behind it.
How the expansion of the gas limit is related to the reduction of transaction fees
Also has a cryptography commentator and office space host MartyParty proposed about this issue. Culper Research has reopened short positions in Ethereum, stating that the network has entered what it describes as a “death spiral.” The company’s thesis is based on supply chain data that includes data from January 2025 February 2026.
The main focus of the report is the increase in wallets since the Fusaka upgrade, and Culper claims that 95% of new wallet creations during this period are related to dust attacks or poisoning. The company further claims that dust-related activity now accounts for around 22.5% of all ETH transactions and more than half of the network’s recent transactions. growth.
In addition, the company analyzes the economic impact of increasing the gas limit on the network, which will contribute to an estimated 90% reduction in transaction fees and 40-50% reduction in tips per gas. Meanwhile, these dynamics can put pressure on the validator’s economy by reducing overall revenue. network activity
In addition to internal network changes, competition from Solana has resulted in increased developer and user activity and reports about Buterin’s ETH dump drew backlash from parts of the ETH community.
Featured image from Pxfuel, chart from Tradingview.com
Editing process because bitcoinist is committed to delivering comprehensive, accurate and unbiased content. We adhere to strict sourcing standards and every page is carefully reviewed by a team of top technology experts and experienced editors. This process ensures the integrity, relevance and value of our content to our readers.
