- Ethereum Layer 2 Solutions Improve Scalability and Reduce Transaction Costs
- Blob transactions are essential for Ethereum’s scale and support of millions of users
In his latest blog post, Vitalik Buterin reignited the conversation around Ethereum (ETH) scalability, offering new insights into how the network can evolve to maintain its dominance in the blockchain ecosystem.
With Ethereum’s growth hitting a bit of a plateau recently, Buterin highlighted the urgency of further adopting Ethereum’s layer 2 solutions. Both to improve the market value of ETH and to solidify its critical role in the broader blockchain economy.
Here it is worth pointing out that his proposal came just days after Buterin announced significant changes in the Ethereum Foundation. Therefore, this could be a pivotal moment for the network as it seeks to adapt and thrive in an increasingly competitive space.
Ethereum – reaching the limits of layer 1
Ethereum has grown significantly, but scalability remains a major issue for it. High transaction fees and congestion have plagued the network, with Vitalik Buterin noting that while layer 1 has matured, it cannot meet the demands of decentralized applications.
He highlighted that “L2 scaling works,” with Layer 2 protocols increasing transaction capacity by 17x and reducing fees. However, challenges such as blob scaling and L2 heterogeneity remain. To overcome them, Ethereum must innovate both technically and socially, further integrating ETH into layer 2 solutions.
What does Buterin offer?
Vitalik Buterin has now outlined a strategy to improve Ethereum’s scalability, which involves deeper integration of ETH into Layer 2 protocols. He noted that L2s should adopt ETH as their “primary collateral” for strengthen the Ethereum ecosystem. According to him, L2 networks would have to burn or gamble part of their gas fees, which would create additional demand for ETH and strengthen its deflationary characteristics.
He also noted that the ecosystem is expected to leverage the value of ETH on the L1 and L2 networks. This strategy aims to provide Ethereum with the scalability needed to support millions of users, while preserving the decentralization and open source ethos on which the platform was founded.
Blob Transactions
One of the key technical aspects of Ethereum’s scaling strategy is the use of “blob transactions” – a crucial component of Layer 2 solutions. BLOB transactions enable more data storage and processing efficient, thus improving the scalability of Ethereum. In fact, Buterin emphasized the importance of increasing the Blob count to handle future demands. He explained,
“If you take the average blob fee from the last 30 days and assume it stays the same while the Blob count increases to 128, Ethereum would burn 713,000 ETH per year.”
The increase in Blobs will help scale Ethereum and create a revenue stream through ETH Burns, contributing to its deflationary pressure. However, Buterin also cautioned that the demand curve is not guaranteed and flexibility is needed for future adjustments.
With EIP-4844 introducing 3 spots per slot and the PECTRA upgrade set to double that, Ethereum is on track to reach 100,000 transactions per second, boosting both scalability and income growth.
Read Ethereum (ETH) Price Prediction 2025-2026
Ethereum – Price Analysis, Market Sentiment
Source: TradingView
At the time of writing, Ethereum remained stable, trading at $1,860 after facing minor resistance at $1,880 earlier this week. The RSI reported neutral sentiment, while trading volumes compare – a sign of caution among market participants.
Analysts also suggested that ETH price action reflected broader market consolidation, with traders eyeing $1,920 as the next key resistance level and $1,800 as critical support.
Additionally, Vitalik Buterin’s latest remarks on the Ethereum Foundation upheaval have sparked various reactions. While Buterin has outlined ambitious goals – improving technical expertise and ecosystem collaboration – critics argue that these changes seem more incremental than transformative.
The debate over Ethereum’s future leadership coincides with concerns about upholding its cyclical philosophy. Especially as stakeholders weigh its decentralized values against the urgent need for speed of execution and innovation.
