The start of the trading week brought unsettling news for Ethereum investors. Vitalik Buterin, a co-founder of the blockchain, sparked significant concern by publicly declaring the network’s scaling strategy, pursued since 2020, to be outdated. As ETH’s price faces substantial pressure, a fundamental question emerges: how does the world’s second-largest cryptocurrency reposition itself now that its original blueprint for Layer-2 networks is no longer viable?
Market Turmoil Amid Strategic Shift
This high-level strategic debate is unfolding against a backdrop of extreme market nervousness. The price of Ether has collapsed by over 30 percent in the past seven days, currently trading around $2,085—a far cry from its 52-week high. Market capitalization has shrunk to approximately $259 billion as investors assess the potential impact of this new direction.
Buterin Calls for a Fundamental Rethink
In a detailed statement, Buterin outlined why the existing “rollup-centric roadmap” no longer aligns with current developments. Two primary factors are driving this change in thinking. First, Layer-2 (L2) solutions are progressing much more slowly toward decentralization than anticipated. Regulatory and commercial hurdles have caused many projects to stagnate in early development phases.
Secondly, the Ethereum base blockchain (Layer 1) is now scaling more efficiently on its own. With transaction fees currently low and further capacity expansions on the horizon, the urgent necessity to rely on external L2 networks for basic scalability is diminishing.
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Ecosystem Partners Respond
Key figures behind major Layer-2 solutions were quick to react to this strategic realignment. Steven Goldfeder of Offchain Labs, the team behind Arbitrum, emphasized his network’s independence, clarifying that while Arbitrum is a close ally, it is not Ethereum itself.
Jesse Pollak, lead for Base at Coinbase, also recognizes the evolving role of L2s. He suggests they should no longer function merely as a “cheaper Ethereum.” Buterin concurs, arguing these networks must now create their own unique value propositions, such as specialized data privacy features or extreme transaction speeds.
The 2026 Upgrade Pathway
Technically, this strategic repositioning will be supported by two major protocol upgrades scheduled for 2026. The first half of the year will see the “Glamsterdam” update, designed to enhance protocol-level efficiency. Developers are already working to raise the gas limit to 70 million.
The coming months will reveal whether this technological leap forward can alleviate market doubts. A critical test will be the planned “Hegota” upgrade in the latter half of 2026. Its success hinges on implementing new structures like “Verkle Trees” to make long-term data storage as efficient as promised by the revised roadmap.
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