Ye Zhang critiques Ethereum rollup fees, emphasizing long-term scalability, Layer-2 growth, and innovation over short-term revenue. Learn more.
Ethereum Rollup Fees Could Be "Toxic": Why Ye Zhang Says Scaling Must Come First
Ethereum’s ongoing dominance in the blockchain world is closely tied to its reputation for innovation and scalability. However, this position may be at risk if the network doesn't make key decisions with its long-term future in mind.
Recently, Ye Zhang, co-founder of Scroll, sparked a critical debate in the Ethereum community by vehemently opposing the idea of charging fees on Ethereum Layer-2 rollups. Zhang argues that prioritizing short-term revenue over strategic ecosystem growth could have devastating consequences for Ethereum’s growth and scalability.
This blog dives into the heart of Zhang's critique, explores the role of Layer-2 rollups, and explains why Ethereum developers and stakeholders must tread carefully when making decisions about the network's economic model.
Why Charging Fees on Rollups Could Harm Ethereum
At the center of Zhang's argument is a straightforward but sharp critique of imposing fees on Layer-2 rollups. Rollups, Ethereum's most promising Layer-2 solutions, significantly improve the network's scalability by processing transactions off-chain, while still relying on the Ethereum main chain for security.
Zhang believes Ethereum’s success stems from its role as the “hub asset” across multiple rollup ecosystems. Rather than acting as a fee-collecting network, Ethereum's value lies in tying together Arbitrum, zkSync, Optimism, Scroll, StarkNet, and other Layer-2 platforms into a unified yet decentralized system.
"Ethereum’s strength lies in being the hub asset across thousands of rollup ecosystems, not in collecting fees from them," says Zhang.
Introducing fees, according to him, risks alienating rollups, potentially driving them to explore alternative data availability solutions outside Ethereum. This could weaken Ethereum’s position within the blockchain ecosystem while forcing developers away from the platform.
Ethereum’s Scalability Challenges and the Role of Rollups
Ethereum's scalability concerns have long fueled efforts to adopt Layer-2 rollups. These systems enable Ethereum to handle more transactions per second while lowering individual transaction costs.
Key projects like the Ethereum Improvement Proposal (EIP) 4488 have already made strides. EIP-4488 optimizes rollups by reducing the costs of data availability, which is critical for rollups to operate at scale. Following this update, Ethereum’s transaction fees dropped dramatically—from tens of millions of dollars daily to approximately $570,000 per day by early 2025.
Despite progress, Zhang’s concerns about scalability remain prescient. Imposing fees on rollups would directly counter these efforts, undermining Ethereum’s ability to grow while rolling back the affordability benefits that users and developers have come to expect from rollups.
Instead, Zhang suggests Ethereum focus its efforts on scaling and shipping upgrades faster, ensuring it retains its competitive edge. “Instead of extracting value from rollups, Ethereum should focus on scaling and ship upgrades faster,” Zhang advises.
Ethereum vs. Solana’s Differing Models
Ethereum is often measured against Solana, a blockchain that employs a vertically integrated model. Unlike Ethereum’s decentralized ecosystem of rollups, Solana uses its native token (SOL) for transaction fees and other functions across all levels of its network.
While Solana’s model ensures a streamlined ecosystem for developers, it lacks Ethereum’s decentralization and flexibility. Ethereum’s choice to allow a diverse range of rollup solutions and assets within its ecosystem has fostered its global adoption and reputation for innovation.
Charging fees on Ethereum rollups could undermine this diversity; Solana’s model may look increasingly attractive to rollup developers who seek lower costs and simpler implementations. Zhang warns that Ethereum’s distinct advantages in being decentralized and adaptable could erode if fees drive rollups elsewhere.
The Long-Term Risks of Rollup Fees
Imposing fees on Layer-2 rollups introduces economic risks that Ethereum cannot afford to ignore. Key potential consequences include:
- Migration Away From Ethereum: Rollup developers may turn to networks like Solana, Polkadot, or Avalanche that don’t impose similar fees.
- Slower Ecosystem Growth: With fewer rollups operating on Ethereum, new decentralized finance (DeFi) projects could face reduced activity and higher deployment costs.
- Competitive Disadvantage: By alienating rollups, Ethereum might lose its position as the blockchain ecosystem’s central player, enabling competitors to catch up or overtake its lead.
Zhang describes these outcomes as inevitable unless Ethereum refocuses on innovation rather than short-term financial gain. "Charging fees on Ethereum rollups is one of the most toxic ideas for Ethereum’s future," he says.
Faster Development Is Key to Ethereum’s Relevance
Ethereum may still dominate the blockchain world, but internal development struggles could make sustaining this position difficult. Former Ethereum Foundation Solidity expert Harikrishnan Mulackal highlights how internal disagreements among Ethereum developers contribute to delays.
"Internal confusion within the Ethereum development community has contributed to frequent disagreements and delays, leaving critical updates in limbo," Mulackal explains.
These delays have frustrated users and opened windows for competing blockchains to address scalability challenges faster. Zhang stresses the importance of making Ethereum more agile in implementing upgrades and delivering solutions that encourage long-term developer and user loyalty.
What Should Ethereum Focus On?
To maintain its dominance and foster ecosystem growth, Zhang and others believe Ethereum should prioritize the following:
- Scaling Beyond Rollups: Focus investment and resources into future scalability solutions, such as sharding and additional Layer-2 optimizations.
- Faster Consensus: Resolve development roadblocks and disagreements with better collaboration and urgency to hit upgrade milestones.
- Innovating Without Extraction: Resist the temptation to prioritize immediate revenue models, instead opting to enhance Ethereum’s core mission as a hub for decentralized innovation.
- Strengthening Partnerships: Nurture relationships with rollups and developers to ensure Ethereum’s Layer-2 ecosystem remains vibrant.
Forging Ethereum’s Future Without Compromise
Ethereum sits at a crossroads, and how it handles its Layer-2 strategy will determine whether its ecosystem thrives or fractures. Charging fees on rollups might seem like a logical way to generate revenue, but the hidden costs of this decision could outweigh the immediate benefits, pushing developers and users to alternatives.
Ye Zhang’s arguments emphasize what makes Ethereum exceptional—not revenue collection, but its ability to serve as the backbone of a decentralized and innovative blockchain world.
"By fostering ecosystem growth rather than extracting revenue from rollups, we’ll ensure Ethereum remains at the heart of all blockchain innovation," says Zhang.
To contribute to Ethereum’s sustained growth, developers, community members, and decision-makers must advocate for scalable solutions over short-term revenue. Support Ethereum not just as a blockchain, but as the foundation of decentralized technology’s future.
It’s time to consider which values will shape the Ethereum you want to see.
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