On May 1, a group of developers within the Ethereum ecosystem unveiled a groundbreaking initiative: Ethereum R1, a layer-2 (L2) scaling solution designed to enhance the Ethereum network without relying on a native token. This independent project sets itself apart by operating solely on donations, devoid of venture funding, pre-mined token allocations, or governance tokens.
In their announcement, the team articulated a vision for general-purpose L2s that emphasizes simplicity, replaceability, and freedom from centralized dependencies. They stated:
“General-purpose L2s should be commodities — simple, replaceable, and free from centralized dependencies or risky governance. Ethereum R1 is our answer to that call — the rollup grounded in credible neutrality, decentralization, and censorship resistance.”
This perspective critiques the trajectory of many existing L2 solutions, which the developers argue resemble new Layer-1s more than they do true scaling solutions for Ethereum. Concerns have risen within the community regarding private allocations, opaque governance structures, and centralized control prevalent in many L2 architectures.
Addressing the context of this innovation, the Ethereum ecosystem has seen significant shifts, particularly following the Dencun upgrade in March 2024, which dramatically lowered fees for L2 networks. Just months later, reports indicated that revenue from the Ethereum base layer had collapsed by an astonishing 99% by September.
This collapse correlated with a sharp decrease in transaction costs on the Ethereum network’s base layer, plummeting to a five-year low of $0.16 per transaction in April 2025. The dynamic nature of Ethereum transaction fees, dictated by demand and network traffic, has resulted in higher costs when demand surges—yet lower fees during periods of diminished demand.
This disruption has sparked debates about the incentives within the Ethereum ecosystem. Critics argue that the current model may engender a detrimental relationship between layer-2 networks and the base layer. However, proponents assert that the multitude of L2 networks is a strong feature of Ethereum, expanding choices for users and allowing flexibility in throughput capabilities.
Anurag Arjun, co-founder of the unified chain abstraction solution Avail, underscored this point, stating that Ethereum’s L2 approach empowers users with a virtually unlimited selection of high-throughput chains, diverging from the less adaptable strategies associated with monolithic blockchain architectures.
As the Ethereum ecosystem evolves, the introduction of Ethereum R1 marks a significant step toward addressing the community’s concerns about decentralization and governance in layer-2 solutions. The ongoing dialogue highlights the delicate balance between fostering growth within the Ethereum network while maintaining the foundational principles that have driven its success.
