Vitalik finally admits that Ethereum's major strategic mistake has been made. Are you still holding your position?

Author: Gu Yu, ChainCatcher

After ETH’s price hit a new low since last May, Ethereum founder Vitalik Buterin published a lengthy article today reflecting on the long-standing Layer2 strategy that has been at the core of Ethereum. He plans to increase investment in Layer1, which is expected to cause a sensational impact across the entire crypto industry.

The original roadmap, centered around Rollups, defined Layer2 as sharded support supported by Ethereum, providing trustless block space. In this article, Vitalik appears to have abandoned his previous advocacy for a “Rollup-centric” scaling model. He pointed out that while Ethereum’s base layer is scaling, the decentralization speed of Layer2 is “far slower than expected,” and many Layer2 solutions cannot or are unwilling to meet the trust guarantees required for true sharding.

“These two facts, for whatever reason, mean that the original vision of Layer2 and its role within Ethereum no longer make sense. We need a new path,” Vitalik said. To outsiders, these statements imply that Vitalik admits the Layer2 narrative is nearly outdated, and future efforts will focus more on scaling the Layer1 itself.

Since its inception, Layer2 has become one of the most capital-enthusiastic and market-focused concepts in the crypto industry. Nearly a hundred Layer2 projects like Polygon, Arbitrum, and Optimism have been launched, raising over $3 billion in total funding. They have played a key role in scaling Ethereum and reducing user transaction costs, with multiple tokens’ FDV exceeding $10 billion long-term.

However, under the strong competition from high-performance blockchains like Solana, Layer2’s performance advantages have not been fully realized, and its ecosystem influence has gradually declined. Currently, only the Base ecosystem remains active at the forefront of the crypto industry, representing Ethereum Layer2.

In addition, Layer2 outages still occur frequently. On January 11 this year, Starknet experienced a outage again after many years of operation. Post-incident reports showed that conflicts between execution and proof layers caused about 18 minutes of on-chain activity rollback. In September last year, Linea was down for over half an hour. In December 2024, Taiko’s mainnet went down for 30 minutes due to an ABI issue, indicating ongoing technical instability.

In fact, Vitalik previously proposed a phased framework to measure the decentralization of Rollups, progressing from Phase 0 (centralized trust committee can veto transactions), Phase 1 (smart contracts begin to have limited governance rights), to Phase 2 (completely trustless).

Despite nearly a hundred Ethereum Layer2 projects, only a few have reached Phase 1. Coinbase’s Layer2 project Base, incubated in 2023, only reached Phase 1 last year. Vitalik has criticized this multiple times. According to L2beat statistics, among the top 20 Rollup projects, only one—Aztec’s zk.money, a privacy protocol—has reached Phase 2, but development has stalled. Another 12 projects are still at Phase 0, heavily reliant on auxiliary functions and multi-signatures.

Vitalik pointed out that Layer2 projects should at least upgrade to Phase 1; otherwise, these networks should be viewed as more competitive, vampire-like “Layer1 networks with cross-chain bridges.”

Beyond potential delays in Layer2 decentralization driven by corporate interests, Vitalik also highlighted technical challenges and regulatory concerns. “I even saw at least one company explicitly state that they may never want to surpass Phase 1. This is not only due to technical reasons related to ZK-EVM security but also because their clients’ regulatory requirements demand ultimate control,” he said.

However, Vitalik has not completely abandoned the concept of Layer2 but has further broadened his view of what Layer2 should achieve.

“We should stop viewing Layer2 as Ethereum’s ‘brand sharding’ and the social status and responsibilities that come with it,” he stated. “Instead, we can see Layer2 as a full spectrum, including chains fully trusted and credit-supported by Ethereum with various unique attributes (not just EVM), as well as options with different degrees of connection to Ethereum. Everyone (or bots) can choose whether to focus on these options based on their needs.”

Regarding future development directions, Vitalik further suggested that Layer2 projects should focus on added value rather than just scaling. His recommended directions include: privacy-focused virtual machines, ultra-low latency serialization, non-financial applications (such as social or AI applications), application-specific execution environments, and pushing beyond the throughput limits of next-generation Layer1.

Additionally, Vitalik again mentioned ZK-EVM proofs, which can be used to extend Layer1. This is a pre-compiled layer embedded into the base layer that “automatically upgrades with Ethereum.”

Over the past year, Ethereum Foundation’s organizational restructuring and two network upgrades have made Layer1 one of the most core strategies. One goal is to gradually increase the gas limit through multiple iterations, enabling L1 to handle more native transactions, asset issuance, governance, and DeFi settlements without overly relying on L2. The Glamsterdam upgrade plan this year includes several technical improvements aimed at reducing MEV-related manipulation and abuse, stabilizing gas fees, and laying a solid foundation for future scaling enhancements.

In earlier statements, Vitalik indicated that 2026 would be a key year for Ethereum to regain ground in sovereignty and trustlessness. Plans include simplifying node operation with ZK-EVM and BAL technology, launching Helios verification RPC data, implementing ORAM and PIR privacy protections, developing social recovery wallets and time-lock features for enhanced security, and improving on-chain UI and IPFS applications.

Vitalik emphasized that Ethereum will correct the compromises made over the past decade in node operation, application decentralization, and data privacy, refocusing on core values. Although this will be a long process, it will make the Ethereum ecosystem stronger.

Additional opinions from industry figures on Vitalik’s article and viewpoints, excerpted by ChainCatcher:

Wei Dai (1kx Research Partner):

I’m glad to see Vitalik discussing the hindsight errors of the Rollup-centric roadmap. But asking “What would I do if I were an L2 layer today?” misses the point.

The key isn’t what Vitalik would do, but what these L2 layers and application teams will do. L2 layers and their applications will always prioritize their own interests over Ethereum’s. To get L2 layers to reach Phase 1 or achieve maximum interoperability with Ethereum, it must be valuable to do so.

For a long time, this has been framed as a security issue (L2 needs L1 to support functions and CR). But in reality, the most important thing is whether Ethereum’s L1 can provide more users and liquidity to L2 layers and applications. (I believe there’s no simple solution, but efforts toward interoperability are correct.)

Lanhu (Well-known Crypto Researcher):

Vitalik means that L2 leverages L1, but in terms of value feedback or ecosystem feedback, L2 hasn’t done enough. Now that L1 can expand itself, there’s no need to rely on L2 for scalability. L2 should either align with L1 (native rollup) or become L1.

What does this mean? It’s bad news for general-purpose L2s but good news for L2 application chains, as we have been saying. L2 application chains can innovate and feed value back into the ecosystem.

Jason Chen (Well-known Crypto Researcher):

As Ethereum itself scales, the most noticeable change is that gas fees are now comparable to L2s, and with further reductions and the gradual rollout of ZK, speeds will be similar. So, L2s are in a very awkward position now. Vitalik’s tweet essentially declares that the initial phase of expanding Ethereum via L2 is complete. If we don’t find new narratives for L2s, they risk becoming relics of a bygone era.

For project teams, the main goal of L2 is to earn transaction fees themselves, but for users, L2s no longer hold much significance—gas and performance are no longer much better than the mainnet.

L2 was born on Ethereum and will die on Ethereum. The disputes among the overlords are also over.

Haotian (Well-known Crypto Researcher):

I’ve mentioned in previous articles over ten times that the general-purpose Layer2 strategy is no longer viable. Each Layer2 should pivot to a specialized Layer2, which is essentially another form of Layer1. Yet, after Vitalik Buterin led the long-stage 2 strategic alignment, many Layer2s still became “abandoned children.”

General-purpose Layer2s carry a heavy development burden: initially facing technical alignment issues with Ethereum’s security, then regulatory issues due to centralized sequencers after token issuance, and finally the burden of unproductive ecosystem development, which is “disproofed.” The fundamental reason is that all Layer2s initially depended on Ethereum Layer1 for survival. When Ethereum started to take the lead in evolving its performance, Layer2 lost all imagination of empowering Ethereum, leaving only burdens and troubles.