Ethereum Researchers Propose New Layer 2 Fee Model to Boost Network Sustainability

Ethereum Researchers Propose New Layer 2 Fee Model to Boost Network Sustainability

Ethereum Eyes Stronger Layer 1 Revenue with EXECUTE-Precompile Initiative

Ethereum’s development community is rallying behind a new proposal aimed at securing the network’s long-term economic health. The “EXECUTE-precompile” proposal, introduced by Ethereum researchers, seeks to revise the fee structure for Layer 2 (L2) applications, ensuring these projects contribute more meaningfully to Ethereum’s Layer 1 (L1) security and stability.

The proposal emerges amid concerns over declining fee revenues and diminishing staking returns—a trend that, if left unchecked, could challenge Ethereum’s resilience as L2 solutions become increasingly popular.

EXECUTE-Precompile Proposal Gains Momentum Among Developers

Ethereum’s community discussions have accelerated around the EXECUTE-precompile, a mechanism designed to realign Layer 2 app economics with the needs of the Layer 1 base network.

Prominent developer @o_herminator explained that the model would require upfront registration and ongoing verification through the FDC-contract, effectively ensuring that L2 projects continuously pay for the security services that Ethereum provides.

“The EXECUTE-precompile could be Ethereum’s key to ensuring that L2 activity eventually funnels meaningful fees back to L1,” said Herminator, an Ethereum researcher.

This proactive strategy highlights growing recognition that Ethereum’s foundational layer must remain financially strong, even as off-chain scalability solutions expand.

Community Weighs Potential Impacts on Layer 2 Economics

Across Ethereum forums and technical platforms, developers and stakeholders are actively debating the proposal’s implications. Discussions reveal widespread support for finding new ways to strengthen Ethereum’s economic backbone, while also acknowledging the potential for higher costs for Layer 2 applications.

If implemented, the proposal could increase economic resilience for ETH holders and validators, preserving incentives critical for maintaining Ethereum’s decentralized security model.

Earlier adjustments, such as EIP-4844, serve as cautionary tales: while they reduced user fees and enhanced network scalability, they also diminished fee revenue, negatively impacting ETH’s valuation in the short term.

Learning from EIP-4844: Striking a Balance Between Fees and Growth

The history of Ethereum upgrades underscores the challenge: lowering user fees can unintentionally weaken network economics. Experts warn that without a sustainable fee model, Ethereum could face long-term vulnerabilities despite technological gains.

By proposing a model where L2 projects contribute back to the main chain, Ethereum’s researchers are aiming to strike a balance between growth and security. As scalability efforts move forward, economic sustainability remains a core priority for Ethereum’s future.