Since its inception, the Ethereum blockchain has undergone a remarkable transformation. Layer 2 protocols have emerged as essential tools for enhancing the network’s scalability and efficiency. In a recent discourse, Vitalik Buterin, co-founder of Ethereum, acknowledged the strides made since 2019, when Layer 2 solutions were still in their nascent stages. Fast forward to 2025, and these solutions have vastly improved, securing billions in value while boosting transaction throughput significantly—reportedly by a factor of 17—while simultaneously reducing transaction fees. Nevertheless, Buterin emphasizes that hurdles persist, notably in terms of scaling capabilities and heterogeneous environments.
A crucial aspect of Ethereum’s architecture is its blob space, which serves as the repository for storing and processing blockchain data. However, Buterin argues that the current capacity of this blob space is insufficient to meet the needs of contemporary Layer 2 applications. As these solutions evolve to support more complex and demanding use cases, the limitations in blob space could become a bottleneck, stymying future expansion. This concern is particularly salient as demand intensifies and more participants engage with the Ethereum ecosystem.
One of the unforeseen consequences of Layer 2 development has been the fragmentation of the ecosystem. Rather than adopting a unified approach, various actors have developed distinct protocols and standards, leading to a patchwork of Chains. This heterogeneity introduces significant challenges in terms of interoperability and composability. Users often encounter difficulties when trying to interact across different Layer 2 solutions, creating a fragmented experience that detracts from the overarching goals of the Ethereum network. Buterin laments that, instead of a cohesive system, users are met with a set of disjointed environments that require tailored navigation.
To address these critical challenges, Buterin proposes a strategic roadmap. On the Layer 1 side, scaling solutions must accelerate the expansion of blob space and enhance the Ethereum Virtual Machine (EVM) to accommodate a broader range of activities. This involves setting higher gas limits to facilitate operations pertinent to Decentralized Finance (DeFi), transaction confirmations, and mass withdrawals. Without these enhancements, Ethereum risks falling behind in a rapidly evolving digital landscape.
On the Layer 2 front, Buterin underscores the necessity for improved security measures to ensure user trust and system integrity. Achieving guarantees such as light client verifiability and censorship resistance is paramount. Furthermore, enhancing interoperability across various Layer 2 chains and wallets will enable a more fluid user experience, allowing seamless interactions through standardized approaches. Establishing efficient bridges and message-passing protocols could significantly reduce friction and foster a sense of unity within the Ethereum ecosystem.
Looking towards the future, Buterin identifies a multi-faceted strategy essential for cementing ETH as a cornerstone of the Ethereum economy. As the principal asset, ETH must be prioritized as collateral across both Layer 1 and Layer 2 solutions. This approach not only enhances the asset’s intrinsic value but also fortifies its role as a store of value and medium of exchange.
Moreover, incentivizing Layer 2 solutions to contribute a fraction of their fees back to the Ethereum ecosystem could create a sustainable funding model. Mechanisms such as fee burning or public goods funding could lead to more robust network support. Additionally, while acknowledging the value of Miner Extractable Value (MEV) for rollups, flexibility remains crucial, as each solution may have unique operational requirements.
In contemplating Ethereum’s sustainability, increasing the blob count may serve as a promising revenue avenue. This proactive approach could generate the necessary funding to support ongoing enhancements, ensuring that Ethereum remains competitive in a landscape filled with emerging blockchain platforms.
While the journey of Ethereum and its Layer 2 protocols is marked by profound progress, it is clear that several obstacles still lie ahead. By addressing blob space limitations, fostering a unified ecosystem, and reinforcing the role of ETH, the network can continue to scale effectively and meet the challenges of an evolving digital landscape.