Speed reading Ethereum Foundation AMA highlights: L1 revenue and value accumulation, Pectra upgrades, L2, etc.

L1 revenue and value accumulation, L2, blob fees, L1 Gas limit targets, risk of large companies taking over Ethereum, Pectra upgrades…

Compiled and compiled by: KarenZ, Foresight News

On February 25, the Ethereum Foundation research team held its 13th AMA on Reddit. Foresight News browsed through more than 300 comments, compiled and summarized the main views of Vitalik Buterin and members of the Ethereum Foundation’s research team. The discussions mainly included L1 revenue and value accumulation, L2, blob fees, L1 ‘s Gas limit goals, the risks of large companies taking over Ethereum, and more discussions on future plans such as the progress of Pectra upgrades.

costs

Question:The blob fee model seems a bit unsatisfactory and somewhat simplistic, as it sets the minimum fee to the Ethereum minimum value (1Wei) present in the protocol. Given the way EIP-1559’s pricing mechanism works, in the process of vigorously expanding blobs, we may see no blob fees for a long time. This may not seem ideal, and we should encourage the use of blobs, but not allow them to be used for free on the Internet. Given this,Are there plans to rebuild the blobs expense model? If so, in what way? What alternative fee mechanisms or adjustments are considered?

Vitalik Buterin: I do think we should keep the agreement concise, avoid over-adapting to short-term situations, and coordinate the execution of Gas and blobs logic in terms of the Gas market. Ethereum Improvement Proposal 7706 (EIP-7706) makes this one of its two main concerns (the other is adding a separate Gas dimension to calldata).

Ansgar Dietrichs: Max Resnick proposed a possible solution in EIP-7762. The plan proposes setting the minimum fee at a level low enough to effectively zero costs during periods when the network is not congested, but high enough to increase fees more quickly as demand increases. This proposal was made relatively late in the development cycle of Pectra’s hard fork, and implementing it may risk causing delays in the hard fork. We referred the matter to RollCall #9 to assess whether the issue was serious enough to justify a possible delay in a hard fork, which can be found at: https://www.example.com. github.com/ethereum/pm/issues/1172 The feedback we have received indicates that L2 no longer considers this an urgent issue. Based on these feedback, we decided to maintain the current model for the Pectra hard fork. However, if there is enough demand in the ecosystem, this is still a viable functional option for future hard forks.

Dankrad Feist: Concerns about the low cost of blobs are greatly exaggerated and short-sighted. But in the short term, I do think setting a higher minimum price for blobs would be a better option.

Justin Drake: Yes, EIP-7762 can increase MIN_BASE_FEE_PER_BLOB_GAS from 1 WEI to something higher, such as 2 ** 25 WEI.

Question: What are the Ethereum Foundation’s plans to increase scalability and reduce major network transaction fees in the next few years?

Vitalik Buterin：

• Expanding L2: More blobs(For example, PeerDAS in Fusaka).

• Continue to improve interoperability and cross-L2 user experience(For example, see the recent Open Intention framework).

• Moderately increase L1 Gas Limit: The basic reason is to understand this.

Ethereum’s value accumulation and currency price issues

problem：The expansion of L2 caused significant losses in value accumulation for L1 and also affected ETH. Other than “L2 will eventually destroy more ETH and conduct more transactions”, what are your plans to solve this problem?

Justin Drake: Blockchains (whether L1 or L2) typically have several sources of revenue. The first type is congestion charges, or “basic charges.” The second type is competition fees, or “MEV”(maximum extractable value).

Let’s discuss competition costs first. In my opinion, as modern apps and wallet designs evolve, MEVs will increasingly flow upstream and be recaptured by apps, wallets, and/or users. Eventually, almost all MEVs will be recaptured by entities closer to the traffic originator, and downstream infrastructure like L1 and L2 will only get what they need from competing fees. In other words,In the long run, L1 and L2 chasing MEVs may be futile.

So what about congestion charges? For Ethereum L1, the historical bottleneck is EVM execution. Consensus participants ‘considerations, such as disk I/O and state growth, are key drivers for setting smaller execution Gas limits. With modern blockchain designs that scale using SNARKs or fraud proof games, we will increasingly live in a world of post-execution scarcity. The bottleneck then shifts to data availability (DA), which is inherently scarce because Ethereum verifiers run on limited home Internet connections, when in fact DAS can only provide linear scalability improvements of approximately 100 times, unlike the almost unlimited scalability improvements provided by Fraud Proof and SNARKs.

So let’s delve into DA economics, which I believe is the only sustainable source of income for L1. EIP-4844 significantly increased DA supply through blobs, which took effect less than a year ago. The chart on the dashboard titled “Average Number of Blobs per Block” clearly shows the growth in demand for blobs over time (which I think is mainly driven by induced demand), gradually growing from 1 blob per block to 2 blobs per block, to 3 blobs per block.We are now saturating the supply of blobs, but we are only in the early stages of blobs price discovery, and low-value “junk” transactions are gradually being squeezed out by more economically intensive transactions.

If the DA supply remains the same for a few months, I expect hundreds of ETH burns every day due to DA. However, Ethereum L1 is currently in “growth mode,” and the Pectra hard fork (which will be launched in a few months) has increased the number of target blobs per block from three to six. This surge in DA supply should suppress the blob fee market, and it will take months for demand to catch up again. As the full danksharding launches in the next few years, there will be a cat-and-mouse game between DA supply and demand.

What will long-term equilibrium look like? My argument has not changed since Devcon’s 2022 speech on “Ultra-stable Money”.In the long term, I expect DA demand to exceed supply.In fact, supply is fundamentally limited by the consensus participants running on home Internet connections, and I think the DA throughput equivalent to about 100 home Internet connections is not enough to meet global demand, especially since humans can always find creative ways to consume more bandwidth.In about 10 years, I expect Ethereum to reach 10 million TPS (about 100 transactions per person per day), which is $1 billion in revenue per day even if each transaction is as low as $0.001.

Of course, DA revenue is only part of ETH’s long-term value accumulation. Two other important considerations are issuance and currency premiums.

Dankrad Feist: All blockchains have value accumulation problems, and there is no perfect solution. Execution layers perform slightly better than data layers because they can extract priority fees that reflect the urgency of transactions, while data layers only charge fixed fees. My answer to value accumulation is first and foremost to create value. While creating value, we should maximize opportunities for future charges. This means maximizing the value of the Ethereum data layer, increasing the overall value of Ethereum, eliminating the need for Alternative Data Availability (alt DA); expanding L1 so that high-value applications can actually run on L1; and encouraging projects like EigenLayer to expand the use of Ethereum as (non-financial) collateral.

Question: If the price of Ethereum falls below a certain level, will the economic security of ETH be threatened?

Justin Drake: If we want Ethereum to be truly resilient to attacks, including attacks from nation states, high economic security is crucial.Currently, Ethereum has approximately $80 billion slashable, which is the largest of all blockchains (33,644,183 ETH pledges, with the current ETH price of $2,385). In comparison, Bitcoin’s economic security is approximately $10 billion (non-slashable).

Question: What is the ticker?

Justin Drake: At least for me. I also hold some BTC, mainly for emotional reasons, as a collection.

L2 aspect

Question: About L2 interoperability, many websites (such as Aave, Uniswap) and wallets (such as MetaMask, Trust Wallet) now have increasingly long drop-down menus to select different L2 networks, resulting in a poor user experience.When will we see these drop-down menus disappear completely?

Vitalik Buterin: I hope chain-specific addresses will reduce the need for such drop-down menus in many scenarios. You can paste a message similar to eth:ink:0x12345… 67890, the application will immediately know you want to interact with Ink and perform the corresponding action on the backend. In many scenarios, this is a more application-specific issue that requires finding best practices to keep users invisible to these complexities as much as possible. Another long-term possibility is better cross-L2 interoperability, allowing more DeFi applications to run only on one major L2.

Question: Given the sentiment in the Ethereum community, are you still convinced that focusing on L2 solutions is the winning choice? If I could go back in time, would anything change?

Ansgar Dietrichs: In the long run, Rollup remains the only principled way to scale blockchain to the scale required at the foundation of the global economy. Looking back, I don’t think we invested enough energy into the path and intermediate user experience to achieve this ultimate goal. Even in a Rollup centered world, L1 still needs to be significantly expanded (as Vitalik recently outlined).We should realize that while advancing L2 work, continuing to advance the L1 expansion path in parallel will provide better value to users during the transition period.

My opinion is that Ethereum has not encountered strong competitors for a long time, so it has become a little complacent. The fiercer competition we are seeing now highlights some misjudgments and forces us to provide an overall better “product”(rather than just theoretically correct first-principles solutions). But yes, to reiterate, some form of Rollup is crucial to achieving the “ultimate expansion.” Specific architectures are still evolving. For example, Justin’s recent exploration of native Rollup shows that specific methods are still changing but the overall direction is clearly in the right direction.

Dankrad Feist: I disagree with this answer in some respects. If you define Rollup as just “extended verification of DA and execution,” how are they different from execution sharding? In fact, we think of Rollup more as a “white label Ethereum.” To be fair, this model releases a lot of energy and money, and if we had only focused on executing sharding in 2020, we would not have made such progress in zkEVM and interoperability research now.Technically, we can now implement anything we want-a highly scalable L1, a more scalable sharded blockchain, or a base layer for Rollup. In my opinion, the best choice for Ethereum is to combine the first and third types.

Future plans and discussions

Question: What types of applications will be designed for Ethereum in the short term (less than 1 year), 1 to 3 years, and more than 4 years?

Ansgar Dietrichs: This is a large question, so I will give a (very) partial answer, focusing on broader trends.

I firmly believe that we are currently at a critical turning point in the history of encryption. We are emerging from a long-term “sandbox” phase, where cryptocurrencies are mainly focused on building internal tools internally, creating infrastructure, and developing basic modules such as DeFi, but have limited connections to the real world. All of these are very important and valuable, but have little impact on the real world.

The current moment is in line with both the level of technological maturity (although there is still some work to be done, we already have a rough grasp of how to build an infrastructure that supports billions of users) and the positive shift in the regulatory environment in the largest market (the United States). Taken together, I believe it is time for Ethereum and cryptocurrency as a whole to get out of the sandbox stage.

This transformation will require a fundamental transformation of the entire ecosystem. The best explanation of this challenge I have encountered is DC Posch’s vision for “real-world Ethereum”: https://daimo.com/blog/real-world-ethereum. The core theme is to focus on building real products for people in the real world, using cryptocurrency as a promoter rather than a selling point per se. Importantly, all of this still retains our core cryptographic values.

Currently, the main type of real-world product is stablecoins (which started earlier due to fewer regulatory restrictions), and there are also some smaller “real-world impact” success stories, such as Polymarket. In the short term, I expect stablecoins will take advantage of this first-mover advantage to further expand their size and importance.

In the medium term, I expect real-world activities to be more diverse: Other real-world assets (such as stocks, bonds, and any asset that can be represented on a chain). In addition to assets, I predict that we will see many new activities and products (e.g., mapping business processes onto the chain, governance, further new mechanisms such as forecasting markets).

All of this takes time, but the energy invested here will pay off in the long run.Too focused on continuing “sandbox” activities (for example, Meme coins) may prove more attractive in the short term, but as real-world Ethereum takes off, you may risk being left behind.

Carl Beekhuizen: Overall, we focus on extending the entire technology stack rather than designing for specific applications. The overall theme is expansion: how we can build the most powerful platform while remaining decentralized and censor-resistant.

In the short term (1 year), the main focus is on launching PeerDAS, which will allow us to significantly increase the number of blobs in each block. We are still improving EVM: hopefully we can launch EOF as soon as possible. A lot of research is being invested in statelessness, EOF, Gas repricing, ZK (zero-knowledge proof) of EVM, etc.

Over the next 1 to 3 years, we will further expand blob throughput and launch some of the research projects listed earlier, including further development of the zkEVM (zero-knowledge proof EVM) program such as ethproofs. org.

Looking to 4 years and beyond, our vision is to add a series of extensions to EVM (L2 will also be adopted and accelerated), blob throughput will increase significantly, we will make improvements in anti-censorship (such as through FOCIL), and further accelerate everything with some ZK (zero-knowledge proof).

Question:There is a view that one day the Ethereum main network should solidify and innovation should be carried out at the L2 level, but at the same time we continue to see new research (such as execution tickets, APS, one-time signatures, etc., and the Ethereum Foundation is also promoting these research, which is great, the competitive environment is constantly changing, and in my experience, digital products “will never be completed.” In other words,What are the odds that we will need to make adjustments after Vitalik’s roadmap/beacon chain is implemented?

Vitalik Buterin: Ideally, we can separate the parts that can be solidified from the parts that need to be continuously developed. We have done this to some extent, through the separation of execution/consensus (the advancement of consensus is bolder, including Justin Drake’s recent idea of a comprehensive upgrade of the beacon chain). I expect these norms to continue to develop. In addition, I think there is already a “light at the end of the tunnel” for many technical issues, because the pace of research is indeed slower than it was about five years ago, and the recent focus has been more on incremental improvements.

problem：Vitalik commented in a recent article about Verge: We will soon also face a decision point, which of three options to choose: (i) Verkle trees,(ii) a STARK-friendly hash function, and (iii) a conservative hash function. Have you decided which path to take?

Vitalik Buterin: It is still under discussion. My personal impression is that over the past few months,The atmosphere leans slightly towards (ii), but has not yet been decided.I also think it’s worth considering these options in the context of the overall roadmap that they will be part of. In particular, the most realistic options for me seem to be:

Option A:

2025: Pectra, possibly EOF

2026: Verkle

2027: L1 execution optimizations (e.g. deferred execution, multi-dimensional Gas, re-pricing)

Option B:

2025: Pectra, possibly EOF

2026: L1 execution optimizations (e.g. deferred execution, multi-dimensional Gas, re-pricing)

2027: Initial push of Poseidon.

2028: Over time, more and more stateless clients will be available.

Option B is also compatible with conservative hash functions; however, in this case, I still tend to push it out gradually, because even if the hash function is less risky than Poseidon, the proof system will still have a higher risk at the beginning.

Justin Drake: As Vitalik said, discussions are still under way. That being said, long-term fundamentals clearly point to (ii). In fact,(i) there is no post-quantum security, and (iii) there is inefficiency.

Question: What recent progress has been made with regard to VDF?

Dmitry Khovratovich: A 2024 paper revealed a potential attack on candidate VDF MinRoot, showing that computing can be accelerated on multicore machines, breaking its sequencing. There is currently a lack of efficient and safe VDF solutions (efficiency means computing on small hardware, security means computing cannot be accelerated), and there is also a lack of reliable VDF candidates. Therefore, the research and application of VDF were temporarily put on hold.

Question: Are there any intentions to expand Ethereum 100 times next year?How receptive are you to simple parameter adjustments in the protocol? For example, three-fold shortening block time, double block limits, increase Gas goals, increase the number of blobs, etc.

Francesco D'Amato：It is unrealistic to expand Ethereum as a whole by 100 times, but it is believed that it is possible to expand blob throughput by 100 times compared to before the 4844. The EIP-4844 has brought about 3x expansion, Pectra expects to bring another 2x expansion, and Fusaka targets 4 to 8x expansion. So we need to expand it another 2 to 4 times. I think we definitely have a way to achieve that goal.

Question: What are the features of the Fusaka & Glamstam upgrade?

Barnab Monnot: Fusaka seems to be focusing mainly on PeerDAS, which is crucial to extending L2, and few people want to delay Fusaka’s delivery because of other features.I personally very much hope to see FOCIL, as well as Orbit, in GlamAmsterdam, which will pave the way for us to move towards SSF (single slot finality). The above focuses more on the consensus layer (CL) and data availability (DA), but in Glamestead, the execution layer (EL) should also work hard to drive L1 expansion, and there is a lot of ongoing discussions about which feature sets are most suitable.

Vitalik Buterin: Native Rollup (such as EXECUTE precompilation) does this to some extent. L2s will still be free to ignore the feature and write their own code, or even add their own backdoors, but they will be able to access a simple and highly secure attestation system that is directly part of L1, so those seeking EVM compatibility are likely to choose this option.

Question: What studies might be ready for development upgrades after Fusaka/Glamstam?

Toni Wahrstätter：PeerDAS is in full swing, and there are also some proposals such as EOF, FOCIL, ePBS, SECP256r1 pre-compilation and deferred execution.PeerDAS is now ready to be included in the Fusaka upgrade, and there seems to be broad consensus on its urgency. The other proposals mentioned above may all be candidates for Glamsburg’s upgrade, but a final decision has not yet been made on which EIPs will be included in the upgrade.

Question: Vitalik has written about proposed measures to be taken in the event of a quantum emergency. So how will we be sure we are in a quantum emergency?

Vitalik Buterin: In reality, combined with media, expert opinions and Polymarket forecasts, we will discuss when a “real”(i.e. capable of cracking 256-bit elliptic curve encryption) quantum computer will emerge.If the timeline is within 1-2 years, it will definitely be an emergency; if it is within 2 years, although it is not urgent, it is still urgent enough for us to put aside the priorities on other roadmaps and first integrate all quantum-resistant technologies into real-time protocols.

Question: What are the Gas Limit Goals for L1 in 2025?

Toni Wahrstätter: There are many different views on Gas limits, but it comes down to a key question: Should we extend Ethereum L1 by increasing the Gas limits, or should we focus on L2 and enable more blobs through advanced technologies like DAS (Data Availability Sampling)?

Vitalik recently posted a blog post discussing the possibility of moderately expanding L1, and he listed reasons why raising Gas restrictions might make sense. However,Increasing Gas limits also comes with trade-offs: higher hardware requirements; state and historical data growth; and bandwidth.

On the other hand, Ethereum’s Rollup centric expansion vision aims to achieve greater scalability without increasing node hardware requirements. Technologies like PeerDAS (short term) and full DAS (medium to long term) are expected to unleash significant expansion potential while maintaining reasonable resource requirements.

Still, I wouldn’t be surprised if verifiers pushed the Gas limit up to 60 million after the Pectra hard fork in April. butIn the long term, the main focus of expansion will likely be on DAS-based solutions rather than just adding Gas limitations.

problem: If the Ethereum beam client experiment (or whatever it is ultimately called) is successful and we have several working Ethereum beam client implementations in 2-3 years, do we need to go through a stage where the current PoS and beam PoS run in parallel and both get pledge rewards, just as we experienced a period of PoW + PoS parallelism before the PoS transition?

Vitalik Buterin: I think we can do instant upgrades directly. The reason why two chains need to be parallel when merging is:

• PoS as a whole is untested, and we need time to get the entire PoS ecosystem up and running long enough to be confident in switching to it.

• PoW may reorg, and the switching mechanism needs to be robust to this.

PoS is final and most infrastructure (such as pledges) will continue. Therefore, we can directly do a large-scale hard fork to switch the verification rules from the beacon chain to the new design. Perhaps at the precise moment of switching, the ultimate guarantee of the economy may not be fully satisfied, but in my opinion, this is a small and acceptable price.

problem: The Ethereum Foundation has launched a $2 million academic funding program in 2025. Which specific research areas are prioritized?How does the foundation plan to integrate academic research results into the broader Ethereum development roadmap?

Fredrik Svantes: Here’s a wish list: https://www.notion.so/efdn/17bd9895554180f9a9c1e98d1eee7aec.

Some of the research directions that the protocol security team is interested in include:

• P2P security: Many of the vulnerabilities we have discovered are related to denial of service attack vectors at the network layer (such as libp2p or devp2p), so improving security in this area would be very valuable.

• Fuzzying: Currently we are conducting fuzzying testing on EVMs, consensus layer clients, etc., but there are definitely more areas to explore (such as the network layer).

• Understand the risks of Ethereum’s current reliance on the supply chain.

• How to use LLM (Big Language Model) to improve protocol security (such as Code Audit, Automated Fuzziness Testing Tools, etc.).

other

Question: Which applications would you most like to see in the Ethereum ecosystem?

Toni Wahrstätter: In my opinion, application developers on Ethereum have done a very good job of identifying users ‘actual needs and meeting those needs, even though L1 or L2 may not be fully ready to support certain applications. I pay special attention to thoseApplications that combine self-hosting with privacyThere are already some great solutions. Two prominent examples are Umbra and Fluidkey, both of which use invisible addresses to bring more privacy to daily user interactions. In addition, applications like Railgun, Tornado Cash, and Privacy Pools provide important value by enhancing privacy on the chain. Going back to your question, I would like to see more wallets make privacy the default setting rather than letting users proactively choose while still maintaining a great user experience (which is harder than people think).

Question: Aren’t you worried about the risk of a big company taking over Ethereum?

Vitalik Buterin: Yes, this is definitely an ongoing concern and I think the Ethereum Foundation’s role should be to proactively respond to these risks.The goal is to maintain the neutrality of Ethereum, not the neutrality of the Ethereum Foundation. Usually the two are consistent, but sometimes inconsistencies arise, and when this happens, we should prioritize the former.The main risks I see currently are concentrated at the L2 and wallet levels, as well as pledge and custody service providers. The Ethereum Foundation has recently begun to intervene in the first two areas to promote the adoption of interoperability standards. That being said, we definitely have an opportunity to be more proactive in reducing risk, and we are exploring options.

Question: Why is the Ethereum Foundation (EF) always so opaque? Transparency and accountability for communities are pitifully scant.

Justin Drake: What do you want to know? The Ethereum Foundation research team has AMAs twice a year and a complete list of 40 researchers is available on the Research.Ethereum.Foundation. Our research is conducted publicly, such as at Ethresear.ch

Question: What do you think of the future of hardware wallets?

Justin Drake: In the future, most hardware wallets will run on mobile Enclave (rather than a stand-alone device like Ledger USB). Through account abstraction, it is already possible to leverage infrastructure such as passkey. I hope to see native integration within ten years (for example, in Apple Pay).

Vitalik ButerinHardware wallets need to be “truly secure” in several key aspects:

1. Secure hardware: Built on an open source and verifiable hardware stack (see e.g. IRIS) to reduce the risks of: (i) deliberately placed backdoors; and (ii) side channel attacks.

2. Interface layer security: Hardware wallets should provide enough transaction information to prevent connected computers from deceiving you into signing something you don’t want to sign.

3. Broad availability: Ideally, we could make a device that was both a cryptocurrency hardware wallet and a secure device for other uses, which would encourage more people to actually buy and use it rather than forget that it exists.

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