Ether Must Play a Bigger Role in Scaling Solutions, Says Vitalik Buterin.

Vitalik Buterin, co-founder of Ethereum, proposed that layer 2 networks should incentivize the use of the network’s native ether (ETH) by allocating a portion of their fees to ETH. This could be achieved through mechanisms like burning fees, staking ETH, or directing proceeds towards supporting public goods in the Ethereum ecosystem.

In a post on Friday, Buterin emphasized that Ethereum scaling plans and network applications should integrate more support for ETH to increase its value. “We should pursue a multi-pronged strategy, covering all major sources of ETH’s value as a triple-point asset,” he stated. He further suggested that ETH be cemented as the primary asset for the entire Ethereum ecosystem, spanning both layer-1 and layer-2 networks, and be used as the main collateral in decentralized applications.

Buterin’s comments come amid growing concerns and criticism of the Ethereum Foundation, particularly as Ethereum loses ground in market capitalization and visibility compared to competitors. The ether-bitcoin ratio has dropped to levels not seen since 2021, with Bitcoin reaching a new all-time high above $109,000. Bitcoin has seen a 160% return in the past year, while ether has only gained 40%, currently trading 30% below its peak from 2021, according to CoinDesk analysis.

In addition to this, Buterin called for increasing Ethereum’s blob count and setting a minimum price for blobs. Blobs are essentially transactions that contain additional data but do not permanently occupy the mainnet, with a lifespan of 18 days. He noted that if blob fees stayed consistent and blob count increased to 128, Ethereum could potentially burn up to 713,000 ETH annually.

Since November, the daily average of blobs has hit a record 21,000, with Coinbase’s BASE and World Chain accounting for over half of the daily activity. However, increased demand for layer 2 solutions could quickly deplete available capacity, raising concerns about future scalability.