Ethereum co-founder Vitalik Buterin emphasized the need for increased layer-1 (L1) capacity on the Ethereum network, despite its ongoing development of layer-2 (L2) solutions. In a blog post dated February 14, Buterin presented his case for expanding Ethereum's gas limit beyond the recent increase from 30 million to 36 million.

According to CoinTelegraph, Buterin's argument centers on the importance of L1 capacity for the network's censorship resistance, L2 interoperability, and essential security functions.

He contends that a higher gas limit, which allows for more transactions per block, is crucial despite the risk of accelerated state growth and the potential centralization of full node operation due to increased resource demands.

Addressing the role of Ethereum's base layer as a fallback in case of L2 failures, Buterin warned that the current capacity might be insufficient for handling mass withdrawals if a major L2 system collapses. He estimated that, without optimizations, Ethereum would need to scale several times over—possibly up to 9 times—to efficiently manage large-scale exits.

Buterin also pointed out the challenges of interoperability between L2s, especially for low-volume assets and non-fungible tokens (NFTs) that often require routing through L1. He estimated a 5.5x increase in L1 capacity is necessary to reduce the costs of such transfers to an acceptable level.

Furthermore, Buterin expressed concerns about security, particularly relating to ERC-20 token issuance on L2s. He suggested that maintaining ERC-20 issuance on L1 could mitigate the risks associated with hostile governance changes on L2 platforms, which could lead to unchecked token minting and broader ecosystem impacts.

Ethereum has been grappling with high gas fees and network congestion, prompting a shift towards a rollup-centric roadmap and the adoption of L2 solutions. While this approach has alleviated some congestion and reduced transaction costs, it has also led to a decrease in fee revenue for the Ethereum mainnet, which recently dropped below $1 million for the first time since September.

In response to these challenges, the upcoming Ethereum upgrade, Pectra, scheduled for April 8, aims to further enhance scalability. The upgrade plans to double the target number of "blobs" per block and introduce a staker-voted mechanism for such adjustments, mirroring the current process for gas limit voting by Ethereum validators.