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L2s currently extract value from Ethereum without sufficient economic feedback to L1
  • Vitalik's post acknowledges L2s capture most economic activity while Ethereum L1 sees limited benefit
  • This creates a 'subsidiary problem' where value accrues to L2 tokens rather than ETH
  • Brett argues this misalignment was predictable given L1's failure to capture execution fees
  • Historical data shows L2 tokens underperforming ETH despite higher activity growth
Brett DiNoviEmpire00:03:19

Supporting quotes

I think that post specifically kills alignment games that were being played...like bro is Ethereum, arbitrum is Ethereum. Like, guys, no, they're separate blockchains. Brett DiNovi
The value is going to be driven towards execution...Ethereum with its monetary premium would appreciate based on just being used as a denominator in these ecosystems and that frankly was not materializing Brett DiNovi

From this concept

The Ethereum L2 Value Proposition Crisis

Vitalik's recent critique highlights how L2s capture most value without flowing back to L1, creating misalignment. MegaETH's founders discuss why this model is broken and how their approach differs by treating Ethereum as a security service provider rather than a symbiotic partner.

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