Solana co-founder challenges L2s, calls them redundant

Solana’s co-founder Yakovenko has recently taken another shot at Layer-2 (L2) rollups, stating that  Layer-1 (L1) solutions, such as the Solana network, already provide efficient, cheap, and secure scaling solutions.

There is no reason to build an L2.

L1s can be faster, cheaper, and more secure.

They aren’t slowed down by a glacially moving L1 data availability stack, or have to compromise security with complex fraud proofs and upgrade multisigs. https://t.co/Ov3YAfz9U4

— toly 🇺🇸 (@aeyakovenko) March 23, 2025

Yakovenko claimed that L2s heavily depend on the L1 scale for data availability and may entail intricate fraud proofs and multi-signature updates. He explained that Solana does not face such problems because it has separate execution and data layers on an efficient base layer.

Yakovenko reacted negatively to Solana’s data generation, referring to it as “measly” at 80 terabytes per year while arguing that L1s cannot scale because of storage. He also warned users against creating baseless L2s, as he said at the beginning of this month, “You can skip creating a valueless L2 and just launch a token.”

Solana competes with all Ethereum L2s, not Ethereum itself

Yakovenko states that Solana’s architecture enables it to rival every Ethereum L2 solution directly, unlike Ethereum itself. He noted that there are many L2s, but it should not be like that because, ideally, there should be an L2 that can meet the present need and at the same time has the potential to fulfil all the functions thanks to the design. 

“There is no point to multiple L2s … if a single L2 can handle parallel execution, then it can use up all the blobspace and run every use case.” – Yakovenko

His comments align with the perspective that only a few important smart contracts exist, hence the apparent overproduction of L2s. He further claimed that L2s act parasitically since they perpetuate their language ecosystems to the detriment of the L1.

Ethereum’s strategy faces questions as L2 networks multiply

Ethereum co-founder Joseph Lubin has also recently taken the opposite view. While addressing the Digital Asset Summit, Lubin stated that Ethereum’s future is in L2 scaling networks. He said that one of the most significant accomplishments of Ethereum was Linea, a product of ConsenSys. He also mentioned MegaETH, which is planned to be further developed, implying faster and cheaper operations.

Lubin pointed to Ethereum’s security and the readiness of L2s to create their basis on that platform as its main benefits. However, an upgrade in March 2024 caused the Dencun transaction fees to reduce by 95%, which raised some questions. 

While it was beneficial for L2s, Ethereum base-layer revenue declined by 99% to the end of the year. More than 140 scaling solutions and 60 roll-up networks are currently on Ethereum, causing concern for fragmentation and value capture on the top chain.

Ethereum users have also criticized the blockchain for lacking permission-less characteristics. Naveen Spark, a commentator on X, said that Ethereum is permissioned as of now since new entrants into the network have to invest in know-your-customer (KYC) checks to acquire ETH. He also notes that privacy tools are not pre-built-in, leaving new users in what he called a ‘surveillance world.’

However, another user, rip.eth, was quick to counter the argument, stating that Ethereum is still permissionless and enhances different levels of privacy. However, Naveen maintained that the beginning has shifted for new users since Ethereum has switched to proof-of-stake.

Ethereum faces support test 

Ethereum is close to a key support zone, and more than 3 million addresses hold 6.12 million ETH at a price range of between $1,886 and $1,944. As a tweet from ali_charts pointed out, this range has become the main barrier to a deeper decline so far. The current ETH price is at $2,003, just above the support band, which focuses much on whether the buyers will hold this level.

According to the on-chain data, 70.43% of all ETH can be classified as “in the money,” with 29.08% in loss. More than 99.5% of ether holders are at breakeven, which means they have yet to make a profit. Finally, the support cluster has very high buying signals, which means that prices will likely react at these levels.

A sudden decline in exchange balances has raised a new significant factor in the market during the past few weeks. In the last 48 days, more than 1,200,000 ETH has been moved out of exchanges. Data obtained from Glassnode reveals that centralized exchange reserves of ETH reduced from 18,155,000 in early February to about 16,967,000 on March 22nd.

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