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Imposing Tariffs on Ethereum Layer 2 Solutions Is ‘Toxic’ for Growth, Says Scroll Exec
As the crypto space continues to evolve and grow, a heated debate has been brewing around the potential imposition of fees on Ethereum Layer 2 solutions. In a recent series of tweets, Ye Zhang, co-founder of Layer 2 smart contract platform Scroll, has sharply criticized such proposals as “one of the most toxic ideas” for Ethereum’s future.
Zhang argues that imposing fees on Layer 2s would be detrimental to the blockchain’s long-term scalability and ecosystem growth. Instead, he believes that Ethereum should focus on enabling Layer 2 expansion over attempting to extract revenue through protocol fees. The co-founder emphasizes that this strategy is more suited to centralized corporations than a decentralized model like Ethereum.
The exec highlights that Ethereum’s true strength lies in its potential to serve as the central asset across a growing number of rollups. With Ethereum already playing a dominant role in ecosystems such as Arbitrum, Optimism, and zkSync, Zhang suggests that more rollups would lead to greater adoption of ETH, expanding its role as a store of value.
However, a pressing concern surrounds the issue of fee revenue decline. As execution moves off-chain, Ethereum’s core network has witnessed a significant drop in fee generation, which raises concerns about “value leakage”. This has led to a sharp decline from nearly $30 million in March 2024 to just $500,000 this year.
The shift in Ethereum’s fee revenue has also impacted ETH’s burn rate, resulting in an increase in net issuance and inflation.
Source: https://cryptopotato.com/imposing-tariffs-on-ethereum-layer-2-solutions-is-toxic-for-growth-says-scroll-exec/
