Vitalik finally admitted to a major strategic mistake by Ethereum.

Author: Gu Yu, ChainCatcher

After ETH prices hit a new low since May of last year, Ethereum founder Vitalik Buterin today published a lengthy article reflecting on Ethereum's long-standing core Layer 2 strategy, planning to increase investment in Layer 1, which will have a significant impact on the entire crypto industry.

The initial roadmap centered on Rollups defined Layer 2 as sharding supported by Ethereum, providing a trustless block space.

The initial roadmap centered on Rollups defined Layer 2 as sharding supported by Ethereum, providing a trustless block space.

In this article, Vitalik appears to have abandoned his previously advocated "Rollup-centric" scaling model. He points out that while Ethereum's underlying layer is scaling, Layer 2's decentralization is "far slower than expected," and many Layer 2s are unable or unwilling to meet the trust guarantees required for true sharding. "These two facts, for whatever reason, mean that the original vision of Layer 2 and its role in Ethereum no longer make sense, and we need a new path," Vitalik said. From an outsider's perspective, these statements mean that Vitalik acknowledges the Layer 2 narrative is almost outdated, and that future focus will be more on scaling Layer 1 itself. Since its inception, Layer 2 has become one of the most sought-after and market-focused concepts in the crypto industry. Nearly a hundred Layer 2 projects, including Polygon, Arbitrum, and Optimism, have emerged, raising over $3 billion in total funding. It has played a crucial role in scaling Ethereum and reducing transaction costs for users, with several tokens achieving a FDV exceeding $10 billion for an extended period. However, under strong competition from high-performance blockchains like Solana, Layer 2's performance advantages have not been fully realized, and the industry influence of its ecosystem projects has gradually declined. Currently, only the Base ecosystem remains active at the forefront of the crypto industry, representing Ethereum Layer 2 and carrying the torch.

Mainly Released Layer 2 Token Market Cap and Funding Data Source: RootData

In addition, Layer 2 outages still occur frequently. On January 11th of this year, Starknet experienced another outage after many years of operation. Subsequent reports indicated that a conflict between the execution layer and the proof layer caused approximately 18 minutes of on-chain activity to be rolled back. Last September, Linea experienced an outage lasting over half an hour.

In addition, Layer 2 outages continue to occur frequently. On January 11th of this year, Starknet experienced another outage after many years of operation. The subsequent report showed that a conflict between the execution layer and the proof layer caused approximately 18 minutes of on-chain activity to be rolled back. Last September, Linea experienced an outage lasting over half an hour.

Source: L2beat

Besides the corporate interests that may delay the Layer 2 decentralization process, Vitalik pointed out that there are also technical challenges and regulatory concerns. "I've even seen at least one company explicitly state that they may never want to go beyond Phase 1, not only for technical reasons regarding ZK-EVM security, but also because their clients' regulatory requirements demand that they have ultimate control," he said. However, Vitalik did not completely abandon the concept of Layer 2, but rather broadened his views on what Layer 2 should achieve. “We should stop viewing Layer 2 as a ‘branded shard’ of Ethereum, and the social status and responsibilities that come with it,” he stated. “Instead, we can view Layer 2 as a complete spectrum, including chains fully trusted and credited by Ethereum with various unique properties (e.g., not just the EVM), as well as various options with varying degrees of connectivity to Ethereum, which individuals (or bots) can choose whether to focus on based on their own needs.” Regarding future development, Vitalik further suggested that Layer 2 projects should focus on added value in the competition, rather than simply scaling. His suggested development directions include: privacy-focused virtual machines, ultra-low latency serialization, non-financial applications (such as social or AI applications), application-specific execution environments, and throughput exceeding what next-generation Layer 1 can support. Furthermore, it's worth noting that Vitalik again mentioned ZK-EVM proofs, which can be used to extend Layer 1. This is a pre-compiled layer written into the base layer and "automatically upgraded with Ethereum." In the past year's organizational restructuring of the Ethereum Foundation and two network upgrades, Layer 1 has become one of the core strategies. One goal is to gradually increase the gas limit through multiple iterations, allowing L1 to handle more native transactions, asset issuance, governance, and DeFi settlements without over-reliance on L2. In this year's Glamsterdam upgrade plan, several improvements aim to reduce MEV-related manipulation and abuse, stabilize gas rates, and lay an important foundation for future scaling improvements. In an earlier speech, Vitalik stated that 2026 will be a pivotal year for Ethereum to regain lost ground in terms of self-sovereignty and trustlessness. The plan includes simplifying node operation through ZK-EVM and BAL technologies, launching Helios to verify RPC data, implementing ORAM and PIR technologies to protect user privacy, developing social recovery wallets and time lock functionality to enhance fund security, and improving the on-chain UI and IPFS applications. Vitalik emphasized that Ethereum will correct the compromises made over the past decade regarding node operation, application decentralization, and data privacy, refocusing on its core values. While this will be a long process, it will make the Ethereum ecosystem stronger. Appendix: Regarding Vitalik's articles and opinions, many industry professionals have also expressed their views. Below are some key excerpts from ChainCatcher: Wei Dai (Research Partner at 1kx): It's good to see Vitalik discuss the hindsight error of the Rollup-centric roadmap. However, asking "If I were in the L2 layer, what would I do today?" misses the point. The key isn't what Vitalik would do, but what these L2 layer and application teams would do. The L2 layer and its applications will always prioritize their own interests, not Ethereum's. For L2 to reach Phase One or achieve maximum interoperability with Ethereum, it must be worthwhile. This issue has long been defined as a security concern (L2 requires L1 to support functionality and CR). However, the most important factor is whether Ethereum's L1 layer can provide more users and liquidity for L2 and applications. (I don't believe there's a simple solution, but the efforts in interoperability are heading in the right direction.) Blue Fox (renowned crypto researcher): Vitalik's point is that L2 utilizes L1, but L2 hasn't done a good job in terms of value feedback or ecosystem feedback. Now L1 can scale itself without relying on L2 for scalability. L2 either aligns with L1 (native rollup) or becomes L1. What does this mean? It's bad news for general L2, but good news for L2 application chains, as we've consistently stated. L2 application chains can be incredibly versatile, providing value back to the ecosystem. Jason Chen (renowned crypto researcher): With the expansion of Ethereum itself, the most significant change is that its gas fees have become almost indistinguishable from those of L2 cryptocurrencies. Gas fees are expected to continue to decrease, and with the gradual rollout of ZooKeeper, its speed will also become comparable to that of L2 cryptocurrencies. Therefore, L2 cryptocurrencies are currently in a very awkward position. Vitalik's tweet essentially declares that L2's initial historical mission of expanding Ethereum has been completed. If new narrative angles are not found for L2 cryptocurrencies, they will become a product of the past and be phased out. For project teams, the biggest goal of developing L2 is still to make money from transaction fees. However, L2 has little meaning for users, since its gas and performance are not significantly different from the mainnet. L2 was born from Ethereum and died from Ethereum; the struggle between the dominant player and the subordinate players has ended. Haotian (renowned crypto researcher): I've mentioned this at least 10 times in previous articles, saying that the general-purpose Layer 2 strategy is no longer viable, and each Layer 2 should be transformed into a specialized Layer 2, which is essentially a type of Layer 1. Unexpectedly, after Vitalik Buterin guided the long-term Stage 2 strategic alignment, many Layer 2s still became "abandoned pawns." Layer 2s, especially general-purpose Layer 2s, carried a heavy development burden. Initially, they faced the technical roadmap of aligning with Ethereum's security; later, they encountered regulatory issues related to the centralized Sequencer after token issuance; and finally, they suffered from the burden of being "falsified" due to a weak ecosystem. The fundamental reason is that initially, all Layer 2s depended on Ethereum Layer 1 for survival. When Ethereum found itself in a precarious position and began to dominate the performance evolution of Layer 1, Layer 2s lost any potential to empower Ethereum, becoming nothing more than a burden and a hassle.