- Pectra upgrade in 2025 doubles L2 blob capacity, but critics argue L2s drain value from Ethereum’s base layer.
- Solana’s lower fees and Firedancer upgrade challenge Ethereum, as post-Merge demand from long-term ETH holders declines.
Ethereum developers and validators are shifting strategies to scale both the base blockchain (Layer 1) and secondary networks (Layer 2), responding to competitive pressures and internal critiques. Over 50% of Ethereum validators now signal support for raising the network’s gas limit, a move that would expand transaction capacity per block.
This follows debates about L2 solutions like rollups “extracting value” from Ethereum’s main chain by diverting activity to cheaper alternatives.
Over 50% of the network is now signaling to increase the gas limit – we did it fam!
Ethereum is scaling! pic.twitter.com/xuW0u9YvBn
— sassal.eth/acc 🦇🔊 (@sassal0x) February 4, 2025
The push to scale Layer 1 gained momentum after Anthony Sossano, an Ethereum educator, revealed validator consensus for a gas limit increase. Raising the limit allows more transactions per block, reducing congestion and fees.
Ethereum co-founder Vitalik Buterin endorsed the effort, citing ongoing upgrades like EIP-4444 and statelessness improvements. These aim to balance scalability with decentralization, addressing concerns that higher gas limits could strain node operators.
L1 is scaling.
A big shoutout to all the developers working on EIP-4444 (history expiry), statelessness (see the new binary tree EIP! https://t.co/ajKpF66BKw ), client efficiency upgrades, and other features that will make higher L1 gas limits decentralization-friendly. https://t.co/DNsHPAhiia
— vitalik.eth (@VitalikButerin) February 4, 2025
Simultaneously, Ethereum prepares for its Pectra upgrade in March 2025, which targets Layer 2 expansion. The update will double the “blob” target from three to six, enhancing data storage for L2s.
Pectra, expected in March, will increase the blob target from 3 to 6, doubling the capacity of L2s.
IMO we should make the blob target also staker-voted, so that it can increase in respose to technology improvements without waiting for hard forks.
— vitalik.eth (@VitalikButerin) February 4, 2025
Buterin proposed making blobs adjustable via validator votes, enabling faster adjustments without hard forks. The Dencun upgrade of 2024 first introduced blobs, slashing L2 fees but drawing criticism for siphoning demand from Layer 1.
Competition with Solana adds urgency
Solana’s lower fees and Firedancer upgrade—boosting transaction speeds—threaten Ethereum’s dominance in decentralized applications. While Ethereum’s institutional interest grows, analyst Joao Wedson warns of weakening demand.
The worst thing that happened to Ethereum was The Merge. Long-Term and Short-Term Holders stopped accumulating ETH since September 2022. Even Exchange addresses, former miners, and funds with over 100k ETH aren’t buying.
A rough path awaits Ethereum pic.twitter.com/eadMbFuigI— Joao Wedson (@joao_wedson) February 4, 2025
He notes long-term and short-term holders stopped accumulating ETH after the Merge in September 2022, a shift he attributes to reduced incentives for stakers and miners.
The Merge, which transitioned Ethereum to proof-of-stake, remains contentious. Wedson argues it discouraged key players—including former miners and large ETH holders—from increasing their positions. Exchange wallets holding over 100,000 ETH also show stagnant growth, suggesting cautious sentiment.
For Ethereum, scaling Layer 1 offers a counterbalance to reliance on L2s. Validators advocating a gas limit above 32 million aim to retain users who might otherwise migrate to Solana or other chains. However, higher gas limits risk centralization if smaller nodes cannot handle increased data loads.
Ethereum must reconcile Layer 1 improvements with L2 growth while reigniting demand among holders. Success would solidify its position; failure could cede ground to rivals leveraging cheaper, faster transactions. As validators vote and developers iterate, the network’s adaptability faces its toughest test yet.
