Ethereum co-founder Vitalik Buterin laid out his latest thoughts on the cryptocurrency coming Friday, addressing head-on an concern that he often discusses: Concerns about ETH’s value, and the part of layer-2 expanding networks in depressing the asset’s economic health.  ,
Layer-2 systems, built atop of Ethereum’s mainnet, now occupy the bitcoin thanks to the infinitesimal gas charges and rapid exchange times they offer. But researchers have predicted that the development of L2s had cost Ethereum trillions of dollars over the next few decades, given how they muck up ETH’s token-burning roadmaps—and so, the stock’s intended negative direction.
Certainly, as other bitcoin have soared in recent months, ETH has remained fiercely stagnant—prompting a famous joke on Crypto Twitter.
On Friday, Buterin, who usually appears more concentrated with specialty technical matters than mega social and business dynamics, acknowledged the problems already posed by L2s related to economics, as well as security and interoperability.
The crypto developer wrote in a blog post that “one possible shortcut for scaling is to give up on L2s and do everything through L1 with a much higher gas limit.” ” However, this approach compromises too much of the benefits of Ethereum’s current social structure”.
Instead of abandoning L2s, Buterin said, developers in the Ethereum ecosystem should focus their efforts on key priorities—including boosting ETH’s price.
” We should think explicitly about economics of ETH”, he wrote. We need to “make sure that ETH continues to accrue value even in an L2-heavy world, ideally by addressing the problem of value accrual in a variety of models.”
Layer-2 networks supporting ETH can either burn a portion of their fees, or permanently stake them, and then donate the proceeds to the Ethereum community. This is one idea that Buterin has been making.
We could give up on L2s and try to do 2016-era-style L1 sharding. But this would be a mistake.
Instead, we should double down on our work on interoperability, ZK-EVMs, etc, and get the benefits of independent innovation and a unified Ethereum at the same time.
This means: pic. twitter.com/TatwiGjAAO
— vitalik. eth ( @VitalikButerin ) January 24, 2025
The Ethereum co-founder further called on layer-2 developers to work quickly to standardize cross-chain features and interoperability, and to further prioritize security—particularly, by eliminating the possibility for censorship on layer-2 chains that are run, in most cases, by private companies.
Last summer, for example, Linea—a layer-2 network owned by Ethereum giant Consensys ( Decrypt ) —manually shut down all on-chain activity in an effort to stop a multi-million dollar hack.
While well-intentioned, the action immediately sparked a tidal wave of outcry from crypto enthusiasts who were furious about how a supposedly decentralized network could be so simply shut down from a corporate office.
On the subject of true decentralization, and on numerous others, Buterin took a fairly blunt tone with layer-2 developers—acknowledging that their networks will be critical to Ethereum’s future, but only if they make critical adjustments in short order.  ,
” We should stay the course, ]and ] continue to scale primarily through L2s, but make sure that L2s actually fulfill the promise that they were meant to fulfill”, he said.
The developer also emphasized the importance of rapidly growing blockspace for layer-2 transactions, to facilitate ecosystem growth—principally via the expansion of “blobs”, a new data storage mechanism introduced in last year’s Dencun upgrade.
Ethereum’s next upgrade, Pectra, now penciled for March, will pave the way to substantially increase the number of blobs on every Ethereum transaction block.
Buterin asserted unwaveringly on Friday that Ethereum’s core developers” should be more willing to explicitly prioritize features that aren’t blobs” in upcoming network upgrades.
All in all, Ethereum’s leading mind appeared unafraid on Friday to speak his mind about what needs to change about the network’s infrastructure, and how soon. As Buterin has demonstrated numerous ways in recent weeks, he’s not playing around anymore—it’s “wartime mode”.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.