Critics say Ethereum must empower L2s, not extract value from them

Ye Zhang, the co-founder of layer-2 network Scroll, has criticized the proposal to charge Ethereum Layer-2 networks. In a post on X, Zhang described such proposals as bad for the network’s long-term growth.

According to Zhang, imposing tariffs on Ethereum L2s to generate fees on the mainnet will damage the network’s future. In his opinion, this strategy is only ideal for centralized organizations, not decentralized networks like Ethereum.

He said:

“Tariffing L2s is one of the most toxic ideas for Ethereum’s future. It trades long-term scalability and ecosystem growth for short-term revenue — a strategy fit for centralized corps, not credibly neutral platforms.”

Zhang’s comments come in response to the growing calls from some sectors of the Ethereum community who believe the network is struggling because Layer-2 networks are extracting value from the mainnet without giving anything back. Those who hold this view point to the decline in activity and fees on the mainnet even as the L2 grows in value.

Interestingly, several people hold this view, including Sonic (formerly Fantom) co-founder Andre Cronje, who noted that L2s are why Ethereum has become inflationary again. Crypto entrepreneur Nic Carter also criticized the proliferation of tokens on Ethereum as the cause of the decline in ETH value.

Ethereum has seen its activity and fees tank after introducing blobs in 2024. Most of the activity and fees now happen on the L2 network, while the mainnet only serves as a data availability and settlement layer. This has significantly hurt ETH, with the token already down 43% this year. Stakeholders, including Ethereum co-founder Vitalik Buterin, propose that L2s should support L1 with a higher percentage of their fees.

ETH’s future is as a store of value

However, Zhang believes many people do not judge Ethereum using the right metric. According to him, Ethereum should not assessed by its revenue and activity because the network is not meant to be accruing all the value. Instead, it’s a hub bringing several ecosystems together.

Zhang said:

“Measuring ETH’s value by Ethereum’s revenue misses the point. ETH’s real strength isn’t in protocol fees — it’s in becoming the hub asset across thousands of roll-up ecosystems. That’s the future.”

In his view, ETH’s long-term potential is to be a store of value asset rather than a regular cryptocurrency. He explained that this will only happen if Ethereum continues its development as a roll-up hub, which will increase its adoption and usage of ETH.

He said:

“Every aligned L2 expands Ethereum’s surface area and social consensus. A thousand scalable roll-ups with ETH as the center > any monolithic chain.”

The crypto founder also noted that Ethereum is not designed to be a vertically integrated network like Solana, which has SOL as its main asset but is limited in scalability. Thus, ETH value is to be a dominant asset across all the L2s, and its value will keep increasing as Ethereum continues to enable L2 networks instead of extracting value from them.

However, Zhang warned that the network could risk losing its position if it imposes taxes on L2. Others seem to agree with this view. Lurebian on X noted that Ethereum is presently the best choice for L2, but that could change if it imposes taxes on these roll-up networks.

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