Something interesting is happening in Ethereum land where L2s are being attacked (and attacking each other) for not being sufficiently "ETH Aligned" A bit of a shitshow, but I think there's a deeper story here about the future of ETH and L2s Obviously, there's very clear and widely recognized concerns about ETH's value accrual and demand, notably after network revenue fell off a cliff after blobs were introduced in early 2024 The root problem is that Ethereum forfeited the most valuable part of the tech stack (MEV and congestion gas pricing) to L2s networks, while keeping the least value part of the stack (settlement and data availability) This has resulted in a imbalanced economic situation where L2s keep the vast majority of the revenue they generate, while paying only small single digit percentages (sometimes as low as 1%) of their revenue to Ethereum for settlement and DA This is why the social layer for Ethereum has gotten so loud about trying to force the "ETH is money" and "L2s expand access to ETH" narratives, because revenue doesn't matter as much when you're trying to go after monetary premium story like BTC But this economic situation has also created friction within the Ethereum community when it comes to L2s -- In @VitalikButerin's recent blog on scaling, he made the following suggestion: "Encourage L2s supporting ETH with some percentage of fees. This could be done through burning a portion of fees, permanently staking them and donating proceeds to Ethereum ecosystem public goods, or a number of other formulas." Interesting thing here is that there is nothing technical proposed that would enforce this alignment, but rather it is a kind of social layer pressure on L2s, which Ethereum community has taken and run with Rather than adjust the actual economics, people can just throw the problem back over the fence to the L2s to solve And the brilliant this is, if they don't, then they're not properly "ETH Aligned" and must be called out, which means I'm helping saving ETH Now we have the major L2 ecosystems all bickering with each other on the timeline about who is the "most ETH aligned", who holds the most ETH onchain, who is alleging dumping too of much of their ETH, etc But ultimately, this whole concept is a red herring, it's not the responsibility of L2s to fix ETH's value accrual problem It is not the fault of the L2 that it only has to pay a small fraction of its net revenue to Ethereum L1 because Ethereum decided to forfeit the most value part of the stack to L2s It is not the responsibility of L2 to burn their own ETH revenue or stake / baghold a bunch of ETH to fix the imbalance L2 rollups are a business and they're going to optimize their business for revenue and growth, and that's okay The question of ETH's economic issues can't be solved through social layer pressure alone, you can't just ask L2s to share the revenue nicely, when it is not in their own economic interests to do so -- This economic imbalance will only be made more clear once the question of "gas abstraction" really takes hold and L2s start to accept other tokens (like stablecoins) beyond ETH as an accepted native form of payment for tx gas fees Any L2 saying or trying to do this today would be hearsay, "That's Not ETH Aligned!!1!" as it would appear to diminish the role of ETH as a gas token across L2s (still seen as a core pillar of ETH demand) But it only takes one major L2 to accept stablecoins as a native form of payment for tx gas fees, and the others will have to step in line in order to not get outcompeted as this is a 10x improvement in UX for normie users And I'm not talking about a work-around like Paymasters that have basically no adoption, but the L2 network itself accepting USDC as gas fee payment and converting single digit percentages of that to pay for L1 settlement + DA in ETH, while keeping the rest in USDC Alt L1 networks will likely never accept other forms of gas tx payment natively as it would undermine their own gas token's utility and their VC investors would crucify them, but L2s don't need to issue their own gas tokens, they can really accept anything -- The solution (at least partially) seems obvious: 1) we need to actually prioritize scaling the L1 (real gas limit increases + accelerate EVM optimizations + rapid blobspace expansions) 2) we need accelerate the creation of native rollups and make them a first class citizen in the L1 so the L1 can once again collect MEV + congestion gas pricing revenue, even if this might alienate some general purpose L2s 3) we need to start the convo of what the 'nationalization' of third party rollups into becoming native rollups would look like (not forcing it, but open the path to it being possible) Start to go down this path and I believe a lot more people still start to feel much more comfortable the future of ETH's economics Still bullish ETH /ramble end