In early 2026, Ethereum stands at a historic crossroads, forcing a fundamental re-evaluation of its rollup-centric roadmap. For years, the community prioritized Layer 1 (L1) as a secure settlement layer while delegating transaction execution to Layer 2 (L2) solutions, yet this strategic isolation has reached its limit.
Amidst this transition, Vitalik Buterin now declares the end of the original vision for Ethereum Layer 2 as “branded shards,” arguing it no longer serves the modern ecosystem.
The creator of Ethereum’s stunning pivot signals a new era for the network, moving away from fragmented scaling toward a more integrated and fluid technical reality.
Learn more: How to Buy Ethereum in 2026: A Beginner’s Step-by-Step Guide
Vitalik Declares Failure of Branded Shard Vision
Developers originally envisioned L2s like Arbitrum and Base as direct extensions of Ethereum, the “branded shards” that would handle massive traffic while inheriting full L1 security. Reality, however, hit significant roadblocks.
On February 3, 2026, Vitalik noted that progress toward “Stage 2” decentralization remains far slower than expected. Most L2s still reside in Stage 1 or even Stage 0, where centralized “Security Councils” maintain power to revert transactions, contradicting Ethereum’s trustless nature.
There have recently been some discussions on the ongoing role of L2s in the Ethereum ecosystem, especially in the face of two facts:
* L2s’ progress to stage 2 (and, secondarily, on interop) has been far slower and more difficult than originally expected
* L1 itself is scaling,…— vitalik.eth (@VitalikButerin) February 3, 2026
Compliance vs. Decentralization
A new and unexpected conflict has emerged between decentralization and regulation. Some L2 teams now explicitly state that they might never move beyond Stage 1. Their institutional and corporate customers demand ultimate control to meet regulatory requirements. Once a legal authority requires a chain to freeze assets or revert a fraudulent transaction, the developers must have a “backdoor” to comply.
Vitalik acknowledges that while this serves specific customer needs, it disqualifies the network from being a true scaling solution for Ethereum. If a multisig bridge mediates the connection between an L2 and the L1, the L2 does not truly scale Ethereum; it merely acts as a separate chain with a convenient link. Reality is forcing a fundamental re-evaluation of what an L2’s purpose should actually be in a regulated world.
Unforeseen Resurgence of Layer 1 Scaling
Original justifications for the rollup-centric roadmap relied on the idea that Ethereum L1 could never scale enough to support global demand. Nonetheless, the technical landscape in 2026 tells a different story. Following the Fusaka upgrade (Dec 2025), Ethereum L1 is scaling directly and efficiently.
Breaking the Gas Limit Barrier
Ethereum developers have successfully navigated upgrades, allowing the L1 to handle more data. As we move through 2026, the network anticipates massive gas limit increases, targeting 200M in the Glamsterdam fork, providing significantly more block space. With L1 fees remaining low even during high activity, the primary reason for generic L2s to exist begins to crumble. Users no longer need to migrate to an L2 just to avoid high gas fees.
Transaction fees on Ethereum dropped in early 2026. Source: The Block
When the L1 can handle thousands of transactions per second at a low cost, the primary reason for generic L2s to exist begins to crumble. Users no longer need to migrate to an L2 just to avoid high gas fees.
Learn more: What is ERC-20? A 2026 Guide to Token Standards
Redefining the Scaling Definition
Vitalik now clarifies that “scaling Ethereum” means creating block space that carries the “full faith and credit” of the mainnet. Protocol rules must guarantee that transactions are valid, uncensored, and irreversible. If an L2 provides high speed but relies on a centralized sequencer or a multisig bridge that can be compromised, it fails this definition.
Because the L1 is growing its own capacity, it no longer requires L2s to act as “shards.” Instead, it requires them to offer specialized services that the L1 simply cannot provide, such as privacy-preserving computations or specific execution environments for gaming and high-frequency trading.
New Solutions
To address these challenges, Ethereum’s founder proposes a technical pivot toward deep integration over isolated execution. Two core pillars defining this vision are Based Rollups and native rollup precompiles, to solve fragmentation via synchronous composability.
Traditional L2s rely on independent sequencers, which fragment liquidity and prevent atomic cross-layer transactions. Vitalik’s proposal for Based Rollups lets Ethereum L1 determine transaction ordering for the L2, enabling synchronous composability, allowing a single L1 transaction to interact with both layers simultaneously.
To balance speed, a hybrid block strategy allows L2 sequencers to provide sub-second latency while finalizing a “slot-ending block” on the L1 every 12 seconds. Furthermore, by “enshrining” ZK-EVM proofs via Native Rollup Precompiles, L2s can inherit Ethereum’s full security and automatic upgrades, effectively eliminating the need for centralized “Security Councils.”
A Crossroad for Layer 2: Adapt or Fail
Many L2s face an existential crisis. Projects that lack a unique community or specialized technology, often referred to as “Zombie L2s,” now struggle to attract users. In a world where Ethereum L1 is cheap and fast, a generic L2 with no unique features offers no reason for migration.
While other L2 blockchains struggle, Base emerges as the gold standard for this new era. Coinbase has successfully shifted the narrative for Base, with superior UX and effective product integration, seamlessly onboarding new users via Coinbase. Thus, Base now competes directly with Solana and BNB Chain. The growth of this prominent Layer 2 depends on distribution and product-market fit, even though it uses Ethereum as a technical foundation.
Vitalik encourages L2 developers to stop trying to be “branded shards.” Instead, they should explore the “full spectrum” of connectivity to Ethereum. This includes:
- Non-EVM VMs: Specialized virtual machines for specific tasks.
- Extreme Scaling: Built for AI data processing or social media throughput.
- Native Oracles: Integrated decentralized dispute resolution.
Have been following reactions to what I said about L2s about 1.5 days ago.
Vitalik Buterin’s new roadmap prioritizes transparency and security. He wants a world where users know exactly what guarantees they have. If an L2 chooses to remain centralized for regulatory reasons, it must be honest about that choice. If an L2 wants the full security of Ethereum, it now has a technical path via Based Rollups and Native Precompiles to achieve it.
