Vitalik Buterin Issues Hard Reality Test to Largest Crypto Networks

Ethereum co-founder Vitalik Buterin said there is a need to reconsider the role of Layer 2 networks as the Ethereum mainnet continues to scale and transaction costs remain low.

In a post on That roadmap envisioned Layer 2s as secure extensions of Ethereum that would handle most transactions while inheriting Ethereum’s security guarantees, often described as “brand fragments” of the network.

Layer 2, such as Arbitrum, Optimism, and Base, are off-chain networks built on top of primary (Layer 1) blockchains like Ethereum. The main objective of these is to increase the speed of transactions and reduce transaction costs on the mainnet.

Think of the Ethereum mainnet as a main room full of people at a conference. Space is limited, so getting in can be slow and expensive. Layer 2 networks act like overflow rooms, allowing people to participate and interact without crowding the main room, while remaining connected to what’s happening there.

‘You’re not scaling Ethereum’

According to Buterin, two developments have challenged that original vision of Layer 2 networks.

First, progress between layers 2 towards later stages of decentralization has been slower and more difficult than expected. Second, Ethereum itself is now scaling directly at layer 1, fees remain low, and gas limits are expected to increase significantly in 2026.

Buterin wrote that scaling Ethereum should mean creating “large amounts of block space backed by the full faith and credit of Ethereum,” where activity is “guaranteed to be valid, uncensored, unreverted, intact, as long as Ethereum itself works.”

He argued that high-performance chains connected to Ethereum via multi-signature controlled bridges do not meet that definition. “If you create a 10000 TPS EVM where its connection to L1 is mediated by a multi-signature bridge, then you are not scaling Ethereum,” he wrote.

In his opinion, Ethereum no longer needs layers 2 to function as “branded shards” for the network. This means that because Ethereum is scaling, layer 2 networks are no longer required to function as official extensions of Ethereum. He also noted that many Layer 2s “cannot or will not” meet the decentralization and security standards required by the model.

Buterin also noted that some layer 2s may intentionally choose not to move beyond “stage 1,” even for regulatory reasons.

In one example, he wrote that a project argued that it could never become more decentralized because “the regulatory needs of their clients require them to have ultimate control.” While he said that approach may be appropriate for those users, he added that such systems should not be described as Ethereum scalable.

“This may be the right thing to do for your customers. But it should be obvious that if you do this, then you are not ‘scaling Ethereum’ in the sense that the rollup-centric roadmap means,” Buterin wrote.

Instead, Buterin suggested viewing Layer 2 as a spectrum of networks with different levels of connection to Ethereum, each offering different trade-offs. He said Layer 2s should focus on providing value beyond basic scalability, such as privacy features, specific application design, ultra-fast transaction confirmation or non-financial use cases, and be clear with users about what guarantees they offer.

Read more: Ethereum co-founder Vitalik Buterin warns that decentralized stablecoins are still deeply flawed

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