Ethereum R1 Challenges the Status Quo: A Token-Free Layer-2 Built on Principles, Not Profits
A new chapter in Ethereum’s evolution has quietly begun—and it doesn’t come with a token.
A team of independent developers has launched Ethereum R1, a Layer-2 scaling solution designed to refocus Ethereum’s ecosystem on decentralization, transparency, and neutrality. Their approach breaks sharply with the prevailing trend of monetized, venture-backed L2 networks that increasingly resemble standalone Layer-1s.
No Tokens, No VCs, No Governance Overreach
Unlike its counterparts, Ethereum R1 is entirely donation-funded, features no pre-mined tokens, and rejects the idea of governance tokens altogether. Its creators are not part of the Ethereum Foundation and have positioned R1 as a “commodity rollup”—a neutral, plug-and-play infrastructure layer free from financial entanglements.
In a May 1 statement on X (formerly Twitter), the team wrote:
“General-purpose L2s should be commodities — simple, replaceable, and free from centralized dependencies or risky governance. Ethereum R1 is our answer to that call — a rollup grounded in credible neutrality, decentralization, and censorship resistance.”
Their critique echoes growing discontent within the Ethereum community about the increasingly opaque and commercial direction of many Layer-2 projects. “Most L2s today are acting more like new L1s than Ethereum scaling solutions,” the developers added, citing private allocations, opaque governance, and centralized control.
Ethereum’s Layer-2 Boom Is a Double-Edged Sword
The Ethereum network has seen an explosion of Layer-2 solutions in recent years, particularly following the Dencun upgrade in March 2024, which drastically reduced transaction costs on rollups.
The result? Ethereum’s base layer saw its revenue collapse by 99% by Q1 2025, according to Token Terminal data.
Base Layer Activity Falls to Five-Year Lows
By April 2025, average Ethereum base layer transaction fees dropped to just $0.16, a level not seen since 2019. While cheaper transactions benefit end users, they also signal a steep drop in demand for block space—and a worrying trend for base-layer sustainability.
Critics Say L2s Undermine Ethereum—Others Call It Evolution
Some argue that Ethereum’s scaling narrative has morphed into fragmentation, where Layer-2s dilute base-layer activity while enriching early token holders and venture capital funds.
But others, like Anurag Arjun, co-founder of abstraction platform Avail, disagree. Speaking to Cointelegraph, he said:
“Ethereum’s Layer-2 strategy offers users a virtually unlimited number of high-throughput chains, unlike monolithic blockchains where scalability is limited by a single protocol.”
Whether that’s a strength or structural weakness remains a divisive topic within the Ethereum community.
The Big Picture: R1 May Signal a Shift Back to Core Values
Ethereum R1 is not just another scaling solution—it’s a philosophical rebuttal. In a world where nearly every new chain comes with its own governance token, venture alignment, and roadmap of monetization, R1’s minimalist, principle-driven model is a bold experiment.
It remains to be seen whether Ethereum R1 will gain adoption. But its presence alone underscores a growing appetite for credible neutrality, especially at a time when blockchain infrastructure increasingly resembles a playground for speculative capital.
In Ethereum’s race toward scalability, R1 asks: What did we leave behind?
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