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Ethereum (ETH) is entering a new phase in which long-held assumptions about scaling are being openly questioned. As spot Ethereum ETFs post their first net inflows after several days of outflows, and on-chain data shows renewed activity on the mainnet, Ethereum co-founder Vitalik Buterin is urging the ecosystem to rethink the role of layer-2 networks.
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Vitalik’s message is direct, Ethereum’s base layer is scaling fast enough that L2s are no longer essential as capacity providers, and their future value lies elsewhere.
ETH's price trends to the downside on the daily chart. Source: ETHUSD on Tradingview
Ethereum Mainnet Scaling Changes the L2 Narrative
In recent statements, Buterin said Ethereum’s original rollup-centric roadmap no longer reflects current conditions. Gas limit increases and protocol upgrades have expanded Layer 1 throughput while reducing fees, making direct mainnet usage more attractive.
Data shows monthly active addresses on Ethereum L1 rising sharply, even as aggregate L2 usage has declined. This shift undermines the idea that L2s act as “Ethereum shards” that inherit full security and censorship resistance from the base layer.
Many L2s have struggled to reach advanced levels of decentralization, often retaining centralized controls for operational or regulatory reasons. According to Buterin, a high-throughput chain connected via a multisig bridge does not scale Ethereum itself, because the trust assumptions differ.
As Ethereum scales directly, L2s are no longer required to provide basic block space. That change, Buterin argues, should free developers from having to force L2s into a single definition.
A Spectrum of L2 Designs and Native Rollups
Rather than abandoning L2s, Buterin is reframing them as a spectrum. Some may be tightly secured by Ethereum, others may be partially connected, and some may be effectively independent systems that interoperate with Ethereum when needed. Transparency around trust and security guarantees is central to this approach.
On the protocol side, Buterin highlighted progress toward native rollups. A proposed rollup precompile would allow Ethereum to verify zero-knowledge EVM proofs at the protocol level.
Because it would be part of Ethereum itself, upgrades and bug fixes would be handled through normal network upgrades, reducing reliance on external governance structures and simplifying interoperability.
ETF Inflows and Market Context
The strategic pivot comes as institutional signals improve. Ethereum spot ETFs recorded a net inflow of about $14 million, led by BlackRock’s ETHA fund, marking a reversal after recent outflows.
While short-term price action remains volatile, the return of ETF inflows suggests continued interest in Ethereum as its base layer strengthens.
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For L2 builders, the message is clear. Competing solely on lower fees is no longer enough. Future relevance will depend on specialization, whether through privacy-focused execution, application-specific chains, ultra-low-latency systems, or non-financial use cases such as identity and AI.
Cover image from ChatGPT, ETHUSD chart on Tradingview
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