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Ethereum co-founder Joe Lubin discussed the future of the smart contract network at the Digital Asset Summit and said layer-2 (L2) scaling networks would continue to be central to the Ethereum ecosystem.
In an exclusive interview with Cointelegraph’s Turner Wright, Lubin said applications will require next-generation databases powered by high-throughput blockchain technologies. The Ethereum co-founder added:
“Another great application, or great layer 2, that’s emerging soon is called MegaETH,” Lubin continued.
The Ethereum co-founder ultimately concluded that newer layer-1 chains will have a tough time competing with the Ethereum network, which already features robust architecture and security guarantees.
Related: Ethereum pushes back Pectra upgrade to conduct third testnet ‘Hoodi’
Investors have doubts about layer-2 approach
According to L2Beat, there are currently over 140 unique scaling solutions for Ethereum, including 60 rollup networks.
Investors have criticized Ethereum’s layer-2 networks as parasitic elements that drain the layer-1 network of revenues while only contributing minimal economic value to the base layer.
Ethereum's average gas fee dropped by 95% following the Dencun upgrade in March 2024, which dramatically lowered transaction fees for layer-2 networks.
This reduction in transaction fees caused a 99% collapse in revenue on the Ethereum base layer by September 2024.
Network fees on the Ethereum layer-1 flatline following the Dencun upgrade. Source: The TIE Terminal
Since that time, the price of Ether (ETH) has generally been in decline, plummeting to a recent low of approximately $1,759 on March 11 and leading many analysts to predict a further price decline in 2025.
Data from Farside Investors shows outflows from Ether exchange-traded funds (ETFs) have continued for 11 consecutive days amid a broader downturn in the crypto markets.
The most significant day of outflows occurred on March 13, when investors pulled a collective $73.6 million from ETH ETFs as they dumped risk-on assets for less volatile alternatives such as cash, government securities and dollar-pegged stablecoins.
Magazine: MegaETH launch could save Ethereum… but at what cost?
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