Ethereum is confronting significant governance and scalability challenges in 2025, sparking debate among investors and developers about its long-term viability. Internal conflicts, leadership disputes, and opaque decision-making have raised concerns, especially following the Ethereum Foundation's $165 million investment in DeFi protocols like Lido, which critics argue could lead to conflicts of interest. The EigenLayer scandal, involving key researchers taking advisory roles in competing projects, has further eroded trust in the foundation's neutrality. Scalability issues, highlighted by gas limit debates, have driven liquidity to faster and cheaper alternatives like Solana. Ethereum's DeFi total value locked (TVL) has declined from over $50 billion as users explore Layer 2 solutions and competing chains. Despite these challenges, institutional adoption remains strong, with daily inflows reaching $1.01 billion in 2025. However, governance delays and regulatory uncertainties pose risks, potentially allowing competitors to erode Ethereum's market share. Analysts predict a $7,000 ETH price target, citing its role in DeFi and smart contract innovation, but emphasize the need for Ethereum to address its governance and scalability issues to maintain its market position.