Ethereum's Layer-2 Scaling Strategy Sparks Debate Amid Fee Reductions

According to Cointelegraph, Ethereum's approach to scaling through multiple layer-2 networks, each with distinct transaction processing speeds and parameters, offers the network a potentially limitless array of high-throughput chains. Anurag Arjun, co-founder of Avail, a unified chain abstraction solution, highlighted this aspect in a recent interview. Arjun noted that Ethereum's strategy differs fundamentally from high-throughput competitors with monolithic architectures. The rollup-centric roadmap allows various teams to experiment with diverse execution environments and block times, fostering a range of high-throughput sidechains rather than a singular architecture on any monolithic layer-1. However, Arjun cautioned that without true interoperability, transitioning between L2s remains as complex as bridging assets across different blockchain ecosystems. Arjun's viewpoint contrasts with critics of Ethereum's L2-focused approach, who argue that these scaling solutions isolate liquidity and ultimately undermine the base layer. Critics claim that L2s contribute significantly to Ether's (ETH) poor price performance over the past year. Meanwhile, Ethereum's layer-1 network fees reached five-year lows in April 2025, with average transaction fees around $0.16. Brian Quinlivan, marketing director at Santiment, an onchain analytics firm, suggested that the fee reduction indicates decreased demand for the base layer and diminishing investor interest in Ethereum. Quinlivan noted in an April 16 blog post that the drop in fees coincides with fewer ETH transactions and interactions with smart contracts, including those in decentralized finance, digital collectibles like non-fungible tokens (NFTs), and other digital asset sectors. The decline in Ethereum's base layer transaction fees and waning retail interest has led many institutional investors to reduce their Ether allocations and revise their price outlooks for the digital asset, which ranks as the second-largest by market capitalization. This situation has sparked discussions about the future of Ethereum's scaling strategy and its impact on the network's overall performance and investor sentiment.