Ethereum’s Vitalik Buterin Indicates New Ways to Solve L1/L2 Fees Issues

A balanced and predictable fees structure for both Layer-1 and Layer-2 solutions on Ethereum (ETH) is inevitable for the ecosystem, Ethereum (ETH) co-founder Vitalik Buterin says. A number of fee sharing models might be helpful in protecting Ethereans from “mixed economy” with extremely volatile tax rates.

Vitalik Buterin indicates “valuable places to start” as L1/L2 fees debate is heating up again

To leave all users of the Ethereum (ETH) ecosystem satisfied, it should adopt mechanisms when Layer 1 and Layer 2 fee accrual are both reliably far from zero and guarantee low variance in the ratio. Addressing this challenge has its economical, tech and cultural facets, Ethereum’s Vitalik Buterin said today, Oct. 12, 2024.

I do think that the status quo has a problem of variance: 12 months ago the conversation was L1 “extracting rent” from L2s, now it’s the other way around. What we don’t want is a mixed economy where the tax rate jumps from 5% to 95% depending on weather. If we can design…

— vitalik.eth (@VitalikButerin) October 11, 2024

Buterin made this statement answering Trenton Van Epps, Ethereum Foundation veteran and steward to the Protocol Guild community.

The Ethereum (ETH) creator also admitted that a year ago, the crypto audience blamed Ethereum’s Layer 1 for “extracting rent” out of Layer 2 networks, but now the discussion turned opposite.

Meanwhile, the unpredictable total fee rate swings in both directions is the only thing users should be concerned by, regardless of the exact distribution of commissions between Layer 1 and Layer 2 validators:

We need to maintain an ecosystem where Ethereum people feel they are on the same team, and this has a tech interoperability part, a values/culture part, and an economics part too

Buterin mentioned two possible solutions to start with — EIP-7762 and based rollups — while other fee sharing models might also be “valuable places to start.”

Ethereum (ETH) fees finally surging

Introduced Aug. 31, 2024, EIP-7762 advances the pricing model for blobs introduced by hotly-anticipated EIP-4844 in order to make blob fees more predictable and address “price discovery” events.

Based rollups, in turn, represent the class of Ethereum’s Layer-2 solutions but with economic rules aligned with associated Layer-1 networks.

Meanwhile, Ethereum (ETH) fees started surging again after three months of decline. As per BitInfoCharts, the average Ethereum fee tripled in the last 30 days, while the median transaction fee added over 400% to hit $2.25.

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