Key points of the quick reading ETH Foundation AMA: L1 income and value accumulation, Pectra upgrade, L2, etc.

L1 income and value accumulation, L2, blob fees, L1 Gas limit target, risks of large companies taking over Ethereum, Pectra upgrade......

Compiled & Organized by: KarenZ, Foresight News

On February 25th, the Ethereum Foundation research team held its 13th AMA on Reddit. Foresight News reviewed over 300 comments, compiled and summarized the main points of Vitalik Buterin and the Ethereum Foundation research team members, discussing topics including L1 income and value accumulation, L2, blob fees, L1 gas limit targets, risks of large companies taking over Ethereum, and more future plans regarding the Pectra upgrade.

Cost aspect

Question: The fee model for blobs seems a bit unsatisfactory, as it oversimplifies to some extent by setting the minimum fee to the minimum value of ETH in the protocol (1Wei). Considering the operation of the pricing mechanism in EIP-1559, we may see no blob fees for a long time during the significant expansion of blobs. This seems less than ideal as we should incentivize the use of blobs while not allowing them to be used on the network for free. In light of this, are there any plans to rebuild the blobs fee model? If so, how? What alternative fee mechanisms or adjustments are being considered?

Vitalik Buterin: I do think that we should keep the protocol simple, avoid overfitting to short-term situations, and coordinate the logic of Gas and blobs in the Gas market. Ethereum Improvement Proposal 7706 (EIP-7706) makes this one of its two main focal points (the other being adding a separate Gas dimension for calldata).

Ansgar Dietrichs: Max Resnick proposed a possible solution in EIP-7762. The proposal suggests setting the minimum fee at a sufficiently low level so that it is still effectively close to zero cost during non-congested periods, but high enough to increase fees more quickly when demand rises. This proposal was relatively late in the development cycle of the Pectra hard fork, and implementing it may carry the risk of delaying the hard fork. We have submitted this issue to RollCall #9 to assess whether it is serious enough to be a valid reason for potentially delaying the hard fork. The feedback we received indicates that the L2 side no longer considers this to be an urgent issue. Based on this feedback, we have decided to maintain the current mode in the Pectra hard fork. However, if there is sufficient demand in the ecosystem, this remains a viable feature option for future hard forks.

Dankrad Feist：The concern about the low cost of blob has been greatly exaggerated, and this concern is short-sighted. However, in the short term, I do believe that setting a higher minimum price for blob would be a better choice.

Justin Drake: Yes, EIP-7762 can increase MIN_BASE_FEE_PER_BLOB_GAS from 1 WEI to something higher, like 2 * 25 WEI.

**Question: What are the plans of the Ethereum Foundation in the coming years to improve scalability and reduce transaction fees on the main network?

Vitalik Buterin：

• Expand L2: more blobs (e.g. PeerDAS in Fusaka).
• Continue to improve interoperability and cross-L2 user experience (e.g., see the recent Open Intents framework).
• Moderately increase the Gas limit of L1 : Click here to understand the basic reasons.

The value accumulation and price issue of ### ETH fang

Question: **L2 expansion leads to significant loss in value accumulation on L1, also affecting ETH. Besides 'L2 will eventually burn more ETH and facilitate more transactions,' do you have any plans to address this issue?

Justin Drake: Blockchains (whether L1 or L2) typically have several sources of income. The first is congestion fees, i.e. "base fees". The second is competition fees, i.e. "MEV" (maximum extractable value).

Let's start by discussing the competition fee. In my opinion, with the development of modern applications and wallet designs, MEV will increasingly flow upstream and be recaptured by applications, wallets, and/or users. Ultimately, almost all MEV will be recaptured by entities closer to the traffic initiator, while downstream infrastructure like L1 and L2 can only gain a small portion from the competition fee. In other words, in the long run, the pursuit of MEV by L1 and L2 may be futile.

So what about congestion fees? For ETH Ethereum L1, historically the bottleneck has been EVM execution. Considerations of consensus participants, such as disk I/O and state growth, are key drivers for setting smaller execution Gas limits. With modern blockchain designs that scale using SNARKs or fraud proofs, we will increasingly live in a post-execution scarce world. The bottleneck then shifts to data availability (DA), which is essentially scarce as Ethereum validators operate on limited residential internet connections, and in reality DAS can only provide a linear approximately 100x scalability improvement, unlike fraud proofs and SNARKs which offer nearly infinite scalability improvement.

Therefore, let's delve into the DA economics, which I believe is the only sustainable source of income for L1. EIP-4844 significantly increased the DA supply through blobs, which took effect less than a year ago. The chart titled 'Average Blob Count per Block' in the dashboard clearly shows the growth of blob demand over time (mainly driven by induced demand), increasing from 1 blob per block to 2 blobs per block, and then to 3 blobs per block. We are now saturating the blob supply, but we are only in the early stages of blob price discovery, and low-value 'junk' transactions are gradually being squeezed out by economically denser transactions.

If the DA supply remains unchanged for several months, I expect hundreds of ETH to be burned daily because of DA. However, the current Ethereum L1 is in a 'growth mode', and the Pectra hard fork (to be launched in several months) will increase the target blob count per block from 3 to 6. This surge in DA supply should suppress the blob fee market, and it will take several months for demand to catch up again. With the full deployment of danksharding in the next few years, there will be a cat-and-mouse game between DA supply and demand.

What will long-term equilibrium look like? Since the 2022 Devcon speech on "super-stable currency," my argument has not changed. In the long term, I expect that the demand for DA will exceed the supply. In fact, the supply is fundamentally limited by the consensus participants running on home internet connections, which I believe is equivalent to about 100 home internet connections' DA throughput not enough to meet global demand, especially as humans always find creative ways to consume more bandwidth. In about 10 years, I expect Ethereum to reach 10 million TPS (about 100 transactions per person per day), even if each transaction is as low as 0.001 US dollars, it will still generate 1 billion US dollars in revenue per day.

Of course, DA income is just a part of the long-term value accumulation of ETH. The other two important considerations are issuance and currency premium.

Dankrad Feist: All blockchains face the problem of value accumulation, and there is no perfect solution. The execution layer performs slightly better than the data layer because it can extract priority fees that reflect the urgency of transactions, while the data layer only charges a fixed fee. My answer to value accumulation is first to create value. While creating value, we should maximize the opportunities for future fees. This means maximizing the value of the ETH layer, increasing the overall value of the Ethereum, thus avoiding alternative data availability (alt DA); expanding L1, enabling high-value applications to run truly on L1; and encouraging projects like EigenLayer to expand the use of Ethereum as collateral (non-financial).

Question: If the price of Ethereum falls below a certain level, will the economic security of Ether be threatened?

Justin Drake: If we wish for Ethereum to truly resist attacks (including those from nation-states), high economic security is crucial. Currently, Ethereum has around $80 billion in economic security (slashable), which is the largest among all blockchains (33,644,183 ETH staked, with the current ETH price at $2,385). In comparison, Bitcoin's economic security is around $10 billion (non-slashable).

问题：What is the ticker?

Justin Drake: At least for me it's ETH. I also hold some BTC, mainly for sentimental reasons, as a form of collection.

L2 aspect

Question: Regarding L2 interoperability, many websites (such as Aave, Uniswap) and wallets (such as MetaMask, Trust Wallet) now have increasingly long drop-down menus to select different L2 networks, which leads to a poor user experience. When can we see these drop-down menus disappear completely?

Vitalik Buterin: I hope that chain-specific addresses can reduce the need for such dropdown menus in many scenarios. You can paste an address similar to eth:ink:0x12345...67890, and the application will immediately know that you want to interact with Ink and execute the corresponding operation on the backend. In many scenarios, this is a more focused approach to application-specific issues, requiring the identification of best practices to minimize users' exposure to this complexity as much as possible. Another long-term possibility is better cross-L2 interoperability, allowing more DeFi applications to run on a single main L2.

Question: Given the sentiment of the Ethereum community, do you still believe that focusing on L2 solutions is the winning choice? Would you make any changes if you could go back in time?

Ansgar Dietrichs: In the long run, Rollup is still the only principled method to scale the blockchain to the scale required for the global economic base. Looking back, I think we have not put enough effort into the path to achieve this ultimate goal and the intermediate user experience. Even in a Rollup-centric world, L1 still needs to expand significantly (as Vitalik recently outlined). We should realize that while advancing L2 work, continuing to parallelly advance the L1 expansion path will provide better value for users during the transition period.

My view is that ETH has not encountered strong competitors for a long time, so it has become somewhat complacent. The more intense competition we see now highlights some misjudgments and forces us to provide a better overall 'product' (not just theoretically correct first-principle solutions). But yes, to reiterate, some form of Rollup is crucial for achieving 'scaling finality'. The specific architecture is still evolving - for example, Justin's recent exploration of native Rollup indicates that specific methods are still changing - but the overall direction is clearly correct.

Dankrad Feist: I disagree with this answer in some ways. If you define Rollup as just 'DA and execution extended verification', how is it different from execution sharding? In fact, we see Rollups more as 'white label Ethereum'. Fair to say, this model has unleashed a lot of energy and funding, and if we had focused only on execution sharding in 2020, we wouldn't have made such progress in zkEVM and interoperability research. Technically, we can now achieve anything we want - a highly scalable L1, a more scalable sharded blockchain, or a foundational layer of Rollup. In my view, the best choice for Ethereum is to combine the first and third options.

Future plans and discussions

Question: What types of applications will be designed for Ethereum in the short term (less than 1 year), 1 to 3 years, and over 4 years?

Ansgar Dietrichs: This is a very broad question, so I will give a (very) partial answer, focusing on broader trends.

I firmly believe that we are currently at a critical turning point in the history of crypto. We're moving out of a long-term "sandbox" phase where crypto is mostly focused on internals – building internal tools, creating infrastructure, developing foundational modules such as DeFi, but with limited connection to the real world. All of these are very important and valuable, but have little impact on the real world.

The current moment is both in line with technological maturity (although there is still some work to be done, we have roughly mastered how to build infrastructure that supports billions of users) and with the positive transformation of the largest market (the United States) regulatory environment. Overall, I believe now is the time for Ethereum and the cryptocurrency market as a whole to emerge from the sandbox phase.

This transformation will require a fundamental change in the entire ecosystem. The best articulation I've encountered for this challenge is the vision of 'Real World ETHereum' proposed by DC Posch:

Currently, the main type of real-world products is stablecoins (due to less regulatory restrictions, they started earlier), and there are some smaller successful cases of 'real-world impact', such as Polymarket. In the short term, I expect stablecoins to further expand their scale and importance using this first-mover advantage.

In the medium term, I expect activities in the real world to become more diverse: other real-world assets (such as stocks, bonds, and any assets that can be represented on-chain). In addition to assets, I predict that we will also see many new types of activities and products (such as mapping business processes to the chain, governance, further new mechanisms like prediction markets).

All of this takes time, but the effort put in here will pay off in the long run. Being too focused on continuing 'sandbox' activities (e.g., Meme coins) may show more appeal in the short term, but with the rise of the real world Ethereum, there may be a risk of being left behind.

Carl Beekhuizen: Overall, we focus on expanding the entire technology stack rather than designing for specific applications. The overall theme is expansion: how do we build the most powerful platform while maintaining decentralization and censorship resistance.

**In the short term (<1 year), the main focus is on launching PeerDAS, which will allow us to significantly increase the number of blobs in each block. We are also improving EVM: we hope to launch EOF as soon as possible. A lot of research is being put into statelessness, EOF, gas repricing, and ZK-ization of EVM (zero-knowledge proof).

In the next 1 to 3 years, we will further expand blob throughput and launch some of the research projects listed above, including further development of the zkEVM (Zero-Knowledge Proof EVM) project, such as ethproofs.org.

Looking 4 years and beyond, our vision is to add a series of extensions to the EVM (L2 will also be adopted and accelerated), significantly increasing blob throughput, improving our resistance to censorship (e.g. through FOCIL), and further accelerating everything through some ZK (zero-knowledge proof).

Question: There is a viewpoint that one day the Ethereum mainnet should be solidified, with innovation happening at the L2 level. However, we continue to see new research (such as execution tickets, APS, one-time signatures, etc.), which the Ethereum Foundation is also promoting. This is great, the competitive environment is constantly changing, and based on my experience, digital products "never complete." In other words, **after the implementation of Vitalik's roadmap/beacon chain, how likely are we to need adjustments?

Vitalik Buterin: Ideally, we can separate the parts that can be solidified from the parts that need to be continuously developed. We have to some extent achieved this by separating execution / consensus (with bolder advances in consensus, including Justin Drake's recent proposal for a comprehensive upgrade to the beacon chain). I expect these specifications to continue to evolve. In addition, I believe that for many technical issues, we have seen the "light at the end of the tunnel" because the pace of research has indeed slowed down compared to about 5 years ago, with recent focus more on incremental improvements.

Question: **Vitalik commented in a recent article about Verge: We will soon face a decision point, that is, which of the following three options to choose: (i) Verkle trees, (ii) STARK-friendly hash functions, (iii) conservative hash functions. Has the decision been made on which path to take?

Vitalik Buterin: Currently still under discussion. My personal impression is that in the past few months, the atmosphere has slightly leaned towards (ii), but it has not been decided yet. I also think it's worth considering these options in the context of the overall roadmap they will become a part of. In particular, the most realistic option for me seems to be:

Option A:

2025: Pectra, possibly EOF

2026: Verkle

2027: L1 execution optimization (e.g., delayed execution, multi-dimensional gas, repricing)

Option B:

2025: Pectra, possibly EOF

2026: L1 execution optimization (such as delayed execution, multi-dimensional gas, repricing)

2027: Poseidon's initial push.

2028: As time goes on, more and more stateless clients.

Option B is also compatible with conservative hash functions; however, in this case, I still prefer to gradually roll out, because even if the risk of hash functions is lower than Poseidon, there will still be a higher risk at the beginning of the proof system.

Justin Drake: As Vitalik said, it is still under discussion. That being said, the long-term fundamentals clearly point to (ii). In fact, (i) lacks post-quantum security, while (iii) is inefficient.

Question: What recent progress has been made in the VDF field?

Dmitry Khovratovich：A paper in 2024 revealed a potential attack on the candidate VDF MinRoot, indicating that it can be accelerated on multi-core machines, breaking its sequentiality. Currently, there is a lack of efficient and secure VDF solutions (efficiency means being able to calculate on small hardware, and security means cannot be accelerated), as well as a lack of reliable VDF candidate solutions. Therefore, research and application of VDF have been temporarily suspended.

Question: Are you willing to expand Ethereum 100 times next year? How acceptable are simple parameter adjustments to the protocol? For example, shorten block time by 3 times, double block limit, increase Gas target, increase the number of blobs, etc.

Francesco D'Amato：Expanding the entire Ethereum network by 100 times is not realistic, but it is believed that compared to before EIP-4844, a 100x increase in blob throughput is possible. EIP-4844 has already brought about a 3x expansion, Pectra is expected to bring another 2x expansion, and Fusaka aims for a 4 to 8x expansion. So we still need to expand by 2 to 4 times. I believe we definitely have a way to achieve this goal.

Question: What are the upgraded features of Fusaka & Glamsterdam?

**Barnabé Monnot: Fusaka seems to focus mainly on PeerDAS, which is crucial for scaling L2, and few people want to delay Fusaka's delivery because of other features.**I personally very much hope to see FOCIL and Orbit in Glamsterdam, which will pave the way for us to move towards SSF (single slot finality). The above content focuses more on the consensus layer (CL) and data availability (DA), but in Glamsterdam, the execution layer (EL) should also strive to drive L1 scalability, with many discussions currently underway on which feature set is most suitable.

**Question: Can a mandatory EIP force L2 to adopt decentralized phase 1 (or even phase 2) given their slow progress towards decentralization?

Vitalik Buterin: The native Rollup (e.g., EXECUTE precompile) has achieved this to some extent. L2 can still choose to ignore this feature and write their own code, even add their own backdoors, but they will be able to access a simple and highly secure proof system, which is directly part of L1, so L2 seeking EVM compatibility are likely to choose this option.

**Question: After Fusaka/Glamsterdam, which research may be ready for development upgrades?

Toni Wahrstätter: PeerDAS is in full swing, with some proposals such as EOF, FOCIL, ePBS, SECP256r1 precompiles, and delayed execution. PeerDAS is now ready to be included in the Fusaka upgrade, and there seems to be a broad consensus on its urgency. The other proposals mentioned above may all be candidates for the Glamsterdam upgrade, but it has not been finally decided which EIPs will be included in the upgrade.

**Question: Vitalik has written about the proposed measures to be taken in the event of a quantum emergency. How do we determine that we are in a quantum emergency situation?

Vitalik Buterin: In reality, combining media, expert opinions, and Polymarket's market predictions, about when a "real" (i.e. capable of breaking 256-bit elliptic curve encryption) quantum computer will appear. If the timeline is within 1-2 years, it is definitely an emergency situation; if it's around 2 years, although not urgent, it is still urgent enough to make us put aside other priority items on the roadmap and first integrate all anti-quantum technologies into real-time protocols.

Question: What is the gas limit target for L1 in 2025?

Toni Wahrstätter: There are many different views on Gas limits, but ultimately it boils down to one key question: should we expand ETH Ethereum L1 by increasing Gas limits, or should we focus on L2 and enable more data blocks (blobs) through advanced technologies such as DAS (Data Availability Sampling)?

Vitalik recently published a blog post discussing the possibility of moderately scaling L1, listing reasons why increasing gas limits might make sense. However, increasing gas limits also comes with trade-offs: higher hardware requirements; state and historical data growth; bandwidth.

On the other hand, the Ethereum Rollup-centric expansion vision aims to achieve greater scalability without increasing node hardware requirements. Technologies like PeerDAS (short-term) and full DAS (medium-term) are expected to unlock significant scaling potential while keeping resource requirements reasonable.

Nevertheless, I wouldn't be surprised if validators raised the Gas limit to 60 million after the Pectra hard fork in April. However, in the long run, the main focus of expansion may be on DAS-based solutions rather than just increasing the Gas limit.

Question: If the Ethereum beam client experiment (or whatever it ends up being called) is successful, and we have several functional Ethereum beam clients within 2-3 years, do we need to go through a phase where the current PoS and beam PoS run in parallel, and both can receive staking rewards, just like we experienced a period of PoW + PoS parallel before the PoS transition?

Vitalik Buterin: I think we can directly do instant upgrades. The reason we need two chains to run in parallel during the merge is:

• PoS as a whole has not been tested, we need time for the entire PoS ecosystem to start and run for long enough to have the confidence to switch to it.
• PoW may experience reorganization (reorg), and the switching mechanism needs to be robust to this.

PoS has finality and most of the infrastructure (such as staking) will continue. Therefore, we can directly conduct a large-scale hard fork to switch the validation rules from the beacon chain to the new design. Perhaps at the exact moment of the switch, economic finality guarantees may not be fully met, but in my opinion, this is a relatively small and acceptable cost.

Question: The Ethereum Foundation has launched a $2 million academic grant program for 2025. Which specific research areas are given priority? How does the foundation plan to integrate academic research outcomes into a broader roadmap for Ethereum development?

Fredrik Svantes: Here is a wish list:

Some research directions of interest to the protocol security team include:

• P2P Security: Many vulnerabilities we discovered are related to denial-of-service attack vectors at the network layer (e.g., libp2p or devp2p), so improving security in this area will be very valuable.
• Fuzzing: Currently, we are conducting fuzzing on EVM, consensus layer clients, and more areas can definitely be explored (e.g. network layer).
• Understand the current risks of the Ethereum supply chain.
• How to use LLM (Large Language Model) to improve protocol security (such as code audit, automated fuzz testing tools, etc).

Others

Question: What applications do you most want to see in the Ethereum ecosystem?

Toni Wahrstätter: In my opinion, application developers on the Ethereum network have done an excellent job in identifying and meeting the actual needs of users, even if L1 or L2 may not be fully ready to support certain applications. I am particularly interested in applications that combine self-custody with privacy, and there are already some great solutions. Two prominent examples are Umbra and Fluidkey, both of which use stealth addresses to bring more privacy to everyday user interactions. In addition, applications like Railgun, Tornado Cash, and Privacy Pools provide significant value by enhancing on-chain privacy. Returning to your question, I hope to see more wallets make privacy a default setting rather than requiring users to actively choose, while still maintaining an excellent user experience (which is more challenging than people imagine).

Question: Aren't you worried about the risk of big companies taking over Ethereum?

Vitalik Buterin: yes, this is definitely an ongoing concern, and I think the role of the ETH Foundation should be to actively address these risks. The goal is to maintain the neutrality of the ETH Workshop, not the neutrality of the ETH Workshop Foundation – usually the two are aligned, but sometimes inconsistencies occur, and when this happens, we should prioritize the former. The main risks I see at the moment are focused on the L2 and wallet layers, as well as staking and custody providers. The ETH Foundation has recently begun to intervene in the first two areas to promote the adoption of interoperability standards. That being said, we definitely have an opportunity to be more aggressive in mitigating risk, and we're exploring options.

**Question: Why is the Ethereum Foundation (EF) always so opaque? Transparency and accountability to the community are terribly lacking.

Justin Drake: What would you like to know? The ETH Foundation research team has two AMAs every year and provides a complete list of 40 researchers at Research.Ethereum.Foundation. Our research is conducted openly, for example on Ethresear.ch.

Question: What is your view on the future of hardware wallets?

Justin Drake: In the future, most hardware wallets will run in the phone enclave (rather than a standalone device like the Ledger USB). With account abstraction, it is already possible to take advantage of infrastructure like passkeys. I'd like to see native integrations in ten years (e.g. in Apple Pay).

Vitalik Buterin: Hardware wallets need to be "truly secure" in a few key ways:

1. Secure hardware: built on open source and verifiable hardware stack (e.g., see IRIS) to reduce the following risks: (i) intentionally set backdoors; (ii) side channel attacks.
2. Interface security: The hardware wallet should provide sufficient transaction information to prevent the connected computer from deceiving you into signing content that you do not want to sign.
3. Wide Availability: Ideally, we can create a device that serves as both a cryptocurrency hardware wallet and a secure device for other purposes, which will encourage more people to truly purchase and use it, rather than forget about its existence.