Ethereum co-founder Vitalik Buterin has delivered a candid assessment of the network's Layer-2 (L2) scaling strategy, admitting its original vision is faltering. In recent statements, Buterin explained that the anticipated reliance on L2s as "branded shards" for scaling is weakening due to two key developments: slow progress by L2s toward full decentralization (Stage 2) and interoperability, and faster-than-expected scaling of the Ethereum mainnet itself.
Buterin noted that with projected gas limit increases in 2026 leading to lower fees, Ethereum no longer depends on L2s for scaling in the way originally envisioned. He raised concerns that some L2 networks remain dependent on centralized components like multisig overrides and may never meet Ethereum's stringent decentralization standards, especially where regulatory requirements demand retained control.
Consequently, Buterin is reframing the role of L2s within the Ethereum ecosystem. He advocates viewing them not as uniform extensions of Layer 1, but as a spectrum of systems with varying security and trust models. Users, he argues, already choose networks based on specific needs. He advises L2 builders to add value beyond pure scaling—through specialized virtual machines or non-financial applications—and to ensure any L2 handling Ethereum-native assets reaches at least "Stage 1" security. He also emphasized the continued importance of improving interoperability.
This shift in Ethereum's strategic outlook has led analysts to highlight a strengthening narrative for XRP. Commentators, such as those from Jungle Inc Crypto News, argue that Ethereum's complexity and fragmented L2 landscape contrast sharply with the XRP Ledger's (XRPL) streamlined design. XRPL offers 3-second transaction finality and institutional-grade settlement without additional layers. Analysts suggest that as Ethereum grapples with scaling challenges and L2 governance issues, XRP's simplicity and efficiency are becoming more appealing, potentially positioning it as a more reliable alternative for decentralized financial applications.
