Vitalik Buterin is the co-founder and CEO of Ethereum. On Friday, he shared some thoughts on blockchains’ future, addressing an issue he has rarely discussed: concerns about ETH’s current price. And the impact layer-2 scale networks have had in lowering the value of this asset.
Layer-2 networksBuilt on Ethereum’s Mainnet, dominates the blockchain now thanks to the miniscule gas fees The speed of their transactions. However, analysts predict that L2s may cost Ethereum. Trillions of Dollars over the next few years, given how they muck up ETH’s token-burning roadmaps—and thus, the asset’s intended deflationary trajectory.
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Buterin appeared on Friday. He often seems more concerned with micro than macro issues. Political and Market DynamicsThe problems that L2s pose in terms of economics as well as interoperability and safety are acknowledged by.
“One possible shortcut for scaling is to give up on L2s, and do everything through L1 with a much higher gas limit,” The crypto developer has written in a blog post. “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,” Apparently, he has written. “We need to make sure that ETH continues to accrue value even in an L2-heavy world, ideally solving for a variety of models of how value accrual happens.”
Buterin floated a proposal today to this end. It involves layer-2 network supporting ETH either by burning a part of their fees or by permanently staking and then donating proceeds to the Ethereum Community.
It is possible to give up L2s, and instead try to create L1s in the style of 2016. It would be a bad idea.
We should instead double-down on our efforts on interoperability and ZK EVMs to get independent innovation as well as a unified Ethereum.
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 (One of 22 investors who own a editorially independent publication Decrypt)—manually shut down all on-chain activity in an effort to stop a multi-million dollar hack.
The move was well-intentioned but it immediately caused a tsunami of criticism. condemnation From crypto users angry over the ease with which a supposed decentralized network can be disconnected from an 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 mechanism for storing data was introduced last year. Dencun upgrade.
Ethereum’s new upgrade. PectraThe release of the, which is now scheduled for March will allow a substantial increase in the number blobs that appear on each Ethereum block transaction.
Buterin declared outright that Ethereum’s core developer “should be more willing to explicitly deprioritize features that are not blobs” Upgrades to the network will continue in the future.
Ethereum’s leader was not afraid to express his opinion on what needed to be changed about the infrastructure of the Ethereum network, and when. As Buterin has demonstrated numerous ways in recent weeks, he’s not playing around anymore—it’s “wartime mode.”
Andrew Hayward is the editor