Ethereum's Future Hinges on Layer-2 Networks, Says Co-Founder Joe Lubin

According to Cointelegraph, Ethereum co-founder Joe Lubin recently shared insights on the future of the Ethereum network at the Digital Asset Summit. Lubin emphasized the importance of layer-2 (L2) scaling networks in the Ethereum ecosystem, suggesting that these networks will remain central to its development. In an interview, Lubin highlighted the need for next-generation databases powered by high-throughput blockchain technologies, which he believes will be best served by new types of L2 networks. He mentioned Linea, an L2 network with promising characteristics, and MegaETH, another emerging L2 application. Lubin expressed confidence in Ethereum's robust architecture and security, suggesting that newer layer-1 chains will struggle to compete with Ethereum's established network. Despite the optimism surrounding L2 networks, there are concerns among investors. Data from L2Beat indicates over 140 unique scaling solutions for Ethereum, including 60 rollup networks. However, some investors view these L2 networks as parasitic, arguing that they drain revenue from the layer-1 network while contributing minimal economic value. The Dencun upgrade in March 2024 significantly reduced Ethereum's average gas fees by 95%, benefiting L2 networks but causing a 99% drop in revenue on the Ethereum base layer by September 2024. This has led to a decline in Ether (ETH) prices, which hit a low of approximately $1,759 on March 11, 2025. Analysts predict further price declines this year. Additionally, data from Farside Investors shows continuous outflows from Ether exchange-traded funds (ETFs) for 11 consecutive days, reflecting a broader downturn in the crypto markets. The largest outflow occurred on March 13, with investors withdrawing $73.6 million from ETH ETFs, opting for less volatile assets like cash, government securities, and dollar-pegged stablecoins.