Ethereum co-founder Vitalik Buterin outlined his vision for Ethereum’s future, tackling frustrations over the stagnation of ETH’s price and the challenges posed by layer-2 (L2) scaling networks. These networks, which offer low fees and faster transactions, have become integral to Ethereum but are raising economic and structural concerns.
While enhancing usability, Layer-2 networks disrupt Ethereum’s token-burning mechanisms, potentially undermining its deflationary model. This has prompted analysts to raise concerns about ETH’s long-term financial health, even as other cryptocurrencies gain momentum. Buterin acknowledged these issues and highlighted the need for L2s to support ETH’s value accrual, suggesting solutions such as burning fees or staking them for the community’s benefit.
Rather than abandoning L2s for a higher-capacity layer-1 approach, Buterin urged developers to focus on improving L2 security, interoperability, and decentralization. He emphasized that L2s must deliver on their promise, citing past incidents like the centralized shutdown of Linea, which undermined Ethereum’s decentralized ethos.
A key priority for Ethereum’s growth, Buterin noted, is expanding blockspace for L2 transactions, facilitated by “blobs,” a data storage feature introduced in the Dencun upgrade. The upcoming Pectra upgrade in March will further increase blob capacity, advancing ecosystem scalability.
Buterin’s remarks underscored the urgency of addressing Ethereum’s technical and economic challenges. He called for decisive action to ensure Ethereum remains robust and decentralized in an increasingly competitive landscape, signaling a shift to “wartime mode” for the network’s future development.
