Ethereum co-founder Vitalik Buterin has laid out a bold vision for the blockchain’s future, addressing growing concerns about Ethereum’s economic dynamics and the role of Layer-2 (L2) scaling solutions.

While L2 networks offer cheaper and faster transactions, their proliferation has raised concerns about Ethereum’s economic model, particularly its deflationary trajectory. This has left ETH’s price lagging behind other cryptocurrencies despite the broader market’s bullish trend.

In a recent blog post, Buterin rejected the idea of abandoning L2s in favor of increasing gas limits on Ethereum’s base layer (L1), emphasizing that such a move would undermine the platform’s decentralized social structure. Instead, he urged developers to refine L2 interoperability, enhance security, and explore mechanisms for L2s to directly support ETH’s value.

Proposals to Strengthen Ethereum

Buterin proposed that L2 networks contribute to Ethereum’s economic health by either burning a portion of transaction fees or staking them to benefit the broader ecosystem. He also called for rapid advancements in cross-chain compatibility and standards to solidify Ethereum’s position as a unified network.

Security remains another critical focus. Buterin stressed the importance of eliminating centralized control over L2s, pointing to past incidents where corporate entities manually halted operations to prevent hacks.

With the next Ethereum upgrade, “Pectra,” set for March 2025, Buterin underscored the importance of expanding “blobs,” a data storage innovation introduced in the previous Dencun update, to grow L2 block space and drive network scalability.

Also read: Ripple CEO Under Fire for Alleged Attempt to Undermine Bitcoin Reserve Initiative