Ethereum, the world’s second-largest blockchain by market capitalization, quietly celebrated its fifth anniversary in 2025 since the mainnet launched on July 30, 2015. As the long-anticipated Ethereum 2.0 upgrade draws closer, this year marks a pivotal moment in its evolution. To reflect on its journey, we explore five defining milestones that have shaped Ethereum’s legacy — from network-splitting controversies to groundbreaking decentralized applications (DApps) and the ambitious roadmap toward scalability and sustainability.
The DAO Hack and the Birth of Ethereum Classic
One of the most controversial events in Ethereum’s history occurred just under a year after its launch: The DAO hack.
In June 2016, a decentralized autonomous organization built on Ethereum called The DAO was exploited by a hacker who siphoned off approximately 3.6 million ETH — then worth over $50 million. The attack triggered a heated debate within the community about how to respond.
The core question was philosophical: Should blockchain be immutable, even in the face of theft? Or should it be flexible enough to correct major errors?
The development team ultimately decided to execute a hard fork on July 20, 2016, rolling back the blockchain to a state before the hack and restoring funds to users. This decision split the community.
A faction opposed to the rollback continued supporting the original chain, believing in absolute immutability. That chain became Ethereum Classic (ETC), which still operates today. Meanwhile, the majority moved to the new chain — simply known as Ethereum (ETH).
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This event not only tested Ethereum’s resilience but also set a precedent for governance in decentralized systems — proving that even decentralized networks must sometimes make centralized decisions in times of crisis.
CryptoKitties: The First Viral DApp
In late 2017, a seemingly simple game took the crypto world by storm: CryptoKitties.
This DApp allowed users to collect, breed, and trade unique digital cats represented as non-fungible tokens (NFTs) using the ERC-721 standard, which was pioneered on Ethereum. At its peak, rare virtual kittens sold for more than $200,000, drawing coverage from mainstream outlets like BBC and The New York Times.
But beyond the novelty, CryptoKitties had a profound impact on the network.
The surge in transactions caused severe congestion on the Ethereum blockchain. Transaction fees spiked, confirmation times slowed, and at one point in January 2018, DApp activity accounted for nearly 30% of all network traffic.
While humorous at first glance, this "kitten crisis" exposed a serious limitation: Ethereum’s inability to scale under heavy load. It became clear that if Ethereum were to become the “world computer,” it needed urgent upgrades to handle mass adoption.
ICO Boom and the Rise of DeFi
Starting in 2017, Initial Coin Offerings (ICOs) exploded in popularity — and Ethereum was at the center of it all.
Over 80% of ICOs launched on Ethereum’s platform using the ERC-20 token standard, raising more than $7.8 billion at the peak of the bubble in 2018. Projects like EOS, Tron, and Chainlink began as ERC-20 tokens before launching their own blockchains.
This wave demonstrated Ethereum’s role as an innovation incubator — a platform where developers could easily create and deploy new digital assets.
But even as ICOs faded, another movement emerged: Decentralized Finance (DeFi).
DeFi leveraged smart contracts to recreate traditional financial services — lending, borrowing, trading — without intermediaries. Protocols like MakerDAO, Compound, and Uniswap began locking up value on-chain.
As of 2025, over $4.3 billion in digital assets are locked across various DeFi protocols — almost all built on Ethereum. This shift solidified Ethereum’s dominance not just in infrastructure, but in real-world utility.
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Ethereum’s Dominance in the DApp Ecosystem
Despite competition from newer blockchains like Solana, Avalanche, and Binance Smart Chain, Ethereum remains the leading platform for DApp development.
It pioneered developer tools like Solidity, the most widely used smart contract programming language, and established critical standards like ERC-20 for fungible tokens and ERC-721 for NFTs — now adopted industry-wide.
While rivals offer faster speeds or lower fees, Ethereum wins in ecosystem maturity, security, and developer adoption. Most major DApps — from NFT marketplaces to yield farming platforms — are either native to Ethereum or have robust integrations with it.
However, challenges remain. High gas fees during peak usage and limited throughput (around 15 transactions per second) highlight that Ethereum has yet to fulfill its vision of becoming a truly global computing platform.
That’s where Ethereum 2.0 comes in.
The Long Road to Ethereum 2.0
Since its inception, Ethereum has operated on a Proof-of-Work (PoW) consensus mechanism — energy-intensive and slow. To address this, developers have been working toward Ethereum 2.0, a major upgrade shifting to Proof-of-Stake (PoS).
Key goals include:
- Improved scalability through sharding
- Enhanced security and decentralization
- Reduced environmental impact via PoS
To accelerate the transition, developers introduced the "difficulty bomb" — a mechanism that gradually increases mining difficulty, making PoW mining economically unviable over time.
However, the rollout has been delayed multiple times. Originally targeting a full launch in mid-2025, the final phase — once called “Serenity” — has been pushed back to late 2025, with some uncertainty remaining.
Still, progress is tangible. The Medalla multi-client testnet launched on August 4, 2025, marking a critical step toward mainnet deployment. If successful over a three-month stress-testing period, the full transition could finally begin.
This phased upgrade represents one of the most complex technical overhauls in software history — and could redefine what blockchains are capable of.
Frequently Asked Questions (FAQ)
Q: What is Ethereum’s primary purpose?
A: Ethereum aims to be a decentralized platform for running smart contracts — self-executing agreements that power applications like DeFi, NFTs, and more.
Q: Why did Ethereum split into two chains?
A: The split occurred after The DAO hack in 2016. One chain (Ethereum) reversed the hack via a hard fork; the other (Ethereum Classic) preserved transaction history unchanged.
Q: What is Ethereum 2.0?
A: Ethereum 2.0 is a series of upgrades shifting Ethereum from energy-heavy Proof-of-Work to efficient Proof-of-Stake, improving speed, security, and sustainability.
Q: Can Ethereum handle high user demand today?
A: Not perfectly. Despite improvements, network congestion and high gas fees persist during peak usage — key issues Ethereum 2.0 aims to resolve.
Q: Is investing in Ethereum risky?
A: Yes. Like all cryptocurrencies, Ethereum experiences high volatility. Prices can swing dramatically based on market sentiment, regulation, or technological shifts.
Q: Are ERC-20 and ERC-721 still relevant?
A: Absolutely. ERC-20 remains the standard for fungible tokens; ERC-721 powers most NFTs. Both continue to drive innovation across the blockchain space.
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Final Thoughts
Over five years, Ethereum has weathered splits, congestion crises, market crashes, and relentless technical challenges — yet it remains at the forefront of blockchain innovation.
From hosting the first viral NFT game to enabling billions in decentralized financial activity, Ethereum has proven its staying power. As it moves toward a scalable, sustainable future with Ethereum 2.0, its next chapter may be its most transformative yet.
For developers, investors, and enthusiasts alike, understanding Ethereum’s past achievements is key to anticipating where it — and the broader crypto ecosystem — might go next.
Keywords: Ethereum, smart contract blockchain, DeFi, ERC-20, ERC-721, Ethereum 2.0, DApp, Proof-of-Stake