TechFlow news, on April 2, Synthetix founder Kain shared his views on the Ethereum ecosystem and its challenges via Twitter: Ethereum's L1 gas fees and ETH burn rates have sharply declined due to L2 scaling diverting transaction activity from L1 and Blob (EIP-4844) reducing data availability costs, putting its economic model in crisis. Validators previously accepted high burn with low yields due to price insensitivity, but the rise of L2s has captured profits formerly accrued by L1, while threatening L1's fee revenue by shifting toward alternative data availability solutions like Celestia.
The core challenge is how ETH can increase block space fees from L2s to restore profitability. Short-term solutions include coordinating the launch of an official L2 or implementing a rent mechanism requiring L2s to return value to L1. Long-term hopes rest on new demand drivers such as tokenized real-world assets to stimulate usage across L1 and L2.
The Ethereum community excels at solving such coordination problems, but must abandon non-essential long-term projects and urgently focus on application breakthroughs to win the competitive race.
It is understood that during a previous Ethereum Foundation AMA, topics including "non-commercial official neutral L2," "L2 vampire attack," "Blob fees being too low," and "Alt DA" were discussed. The EF's overall stance was that current issues are transitional pains, and they prefer resolving them through technological upgrades and long-term growth strategies rather than radical interventions.
