Ethereum scalers vow to soldier on after Vitalik’s about-face on Ethereum growth

Founders of layer 2 blockchains scrambled to defend their work after Vitalik Buterin’s surprising about-face on the technology earlier this week.

For years, Ethereum developers working to improve the blockchain were guided by the belief that it could not reach mass adoption without so-called layer 2 blockchains. On Tuesday, Buterin shocked the Ethereum community when he said that notion “no longer makes sense.”

And just about every layer 2 founder flocked to social media to respond to Buterin’s missive.

“Challenge accepted,” Optimism founder Karl Floersch wrote in all caps on X.

A new path

Buterin’s change of heart does not necessarily mean the path laid out for the largest smart contract blockchain will change. But it does throw that path into serious doubt.

Buterin remains the most influential voice in Ethereum, and he leads the Ethereum Foundation, the blockchain’s most prolific contributor.

Buterin cited two reasons for his reversal: the disappointing progress of layer 2 blockchains and the progress developers have made with Ethereum itself.

Years ago, a consensus emerged among Ethereum developers: the fastest path to mass adoption ran through layer 2s, affiliated blockchains that would process and batch transactions before funnelling them to Ethereum for final settlement.

This plan has long guided decision-making among Ethereum developers.

It’sMajor upgrades in recent years have made Ethereum more accommodating of layer 2 blockchains.

But the plan came under fierce criticism over the past year, as Ethereum’s native cryptocurrency, Ether, saw lacklustre price action while Bitcoin soared in the wake of Donald Trump’s reelection in the US.

Many felt that layer 2s had become “parasitic,” processing transactions that would otherwise occur on Ethereum.

And that led to a renewed focus on scaling Ethereum itself.

Able and willing?

Buterin did not claim these networks are parasitic in his post this week.

But he did say that layer 2 blockchains would have to find a new raison d’être.

“[The layer 1] does not need layer 2s to be ‘branded shards,’ because the layer 1 is itself scaling. And layer 2s are not able or willing to satisfy the properties that a true ‘branded shard’ would require,” he wrote.

“But that’s fine! It’s fine because Ethereum itself is now scaling directly on layer 1.”

He suggested layer 2 developers “identify a value add other than ‘scaling,’” such as privacy, or application-specific features.

Many founders said they had already done so.

“We’re already leaning into the kind of differentiation Vitalik is talking about here, and have been supported by the EF in doing so: building the best apps, native account abstraction, privacy, scaling, and more,” Base’s Jesse Pollak wrote.

“We’ve been talking about this for over a year,” Zksync founder Alex Gluchowski wrote. That chain, he said, would double down on transaction privacy and become “the Bank Stack of Ethereum.”

Steven Goldfeder, a co-founder of Arbitrum, cast doubt on the notion that Ethereum would soon be able to handle the transaction volume seen on layer 2 blockchains.

Regardless, layer 2 blockchains would be necessary, he said.

“In 2018, rollups were primarily created for scaling. Today, they’re as much about customisation and dominion as they are about scaling,” he wrote.

“The fact that Ethereum has layer 2s is a superpower that enables it to win institutions that other layer 1s simply have nothing to offer.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.