Ethereum’s Strategic Reboot: Why Layer 1 is Back in Style?

In crypto, long-term vision often collides with short-term reality. And nowhere is that tension more evident than in Ethereum’s ecosystem right now.

For years, Ethereum developers, researchers, and community leaders have rallied around a “Layer 2–centric” future — a scaling strategy that pushes most user activity off the core Ethereum blockchain (L1) and onto various rollups, sidechains, and zero-knowledge systems. The rallying cry? “Get off the L1.” The L1 was considered too precious, too slow, and too expensive for everyday users. That’s what the rollups were for.

But in this week’s Bankless Weekly Rollup, co-hosted by Bread (of MegaETH), a surprising new trend is emerging: Ethereum is slowly pivoting back toward its base layer.

Ethereum’s Layer 1 Comeback

This week’s biggest story wasn’t just that Ethereum L1 is getting attention — it’s that its stewards are starting to treat it like a product again.

Incoming Ethereum Foundation Executive Director Tamás Blummer is reportedly drafting a “broad strategy document” for the first time in EF history — an attempt to align stakeholders, reduce ambiguity, and fix what many see as a leadership vacuum in Ethereum’s decentralized ecosystem.

Alongside that, researcher Justin Drake tweeted that the Ethereum L1 could scale 1,000x in throughput using zkEVMs — and later disavowed his infamous “L1 is not for users” stance. The cherry on top? A growing chorus of Ethereum app builders are now launching directly on mainnet, not Layer 2s.

Ethereum may not be “going monolithic,” but it’s certainly rethinking what role the base layer should play.

MegaETH Testnet: 10ms Blocks, Real-Time Apps

One project accelerating this rethink is MegaETH, a new L2 that recently launched its testnet — and stunned developers with its 10 millisecond block times.

Bread, now on the MegaETH team, explained that this isn’t just faster Ethereum — it’s a fundamental shift in UX. At this speed, traditional wallet modals and confirmation spinners break. The blockchain settles so fast that apps must completely rethink how they interact with users. Think swaps that feel like tapping a button on Instagram.

Oracle provider RedStone, for example, is updating on-chain prices every 2.4 milliseconds, pushing 416 transactions per second just from price feeds alone. These speeds allow for real-time games, AI agents, and consumer-grade mobile apps to be built directly onchain — not just DeFi.

If Ethereum wants to remain the center of crypto innovation, these breakthroughs matter. But it also raises the question: why should Ethereum L1 be relegated to a passive “settlement layer” if meaningful innovation is returning to its doorstep?

Base Token Chaos and Content Coins

Meanwhile, Coinbase’s Layer 2, Base, found itself at the center of a whirlwind after releasing a new experimental token. Or was it a meme coin? Or a content coin?

The team tokenized a screenshot of a marketing video using Zora, calling it a “content coin,” and without much explanation, posted it to crypto Twitter. Traders went wild. The coin spiked to an $18 million market cap — then plummeted when a second coin dropped hours later.

Critics accused Base of “rugging” its community. Jesse Pollak, Base’s public face, jumped into Twitter Spaces (one of them run by scammers) to explain the concept. The goal, he said, was to normalize collectible token issuance, not enable speculation.

The fiasco revealed a key tension: if everything can be tokenized, who decides what has value? The line between memes, content, and actual projects is blurrier than ever.

OHM’s $6 Billion Crash and the Illusion of Liquidity

In another market-shaking moment, the token for real-world-asset chain Mantra (OM) crashed 92 percent in six hours — wiping out over six billion dollars in market cap.

It wasn’t a hack. It wasn’t fraud. It was a liquidity mirage.

As analysts later uncovered, the crash stemmed from cascading liquidations on centralized perpetuals exchanges — a relatively small amount of forced selling that triggered a massive price spiral due to shallow liquidity.

The lesson is simple: market cap does not equal real liquidity. And in crypto’s fragmented, 24/7 casino, even the largest-looking tokens can vaporize in minutes.

The Bigger Picture: Pragmatism is Back

Zooming out, this week’s stories all point toward a broader cultural shift in crypto. Less idealism. More pragmatism. Less 30-year ivory tower thinking. More focus on delivering value — today.

Ethereum is rethinking its roadmap.
L2s are pushing boundaries.
Communities are testing the limits of what tokens even are.
And the market continues to punish the unserious.

That’s the mark of a maturing industry — or at least one that’s ready to grow up a little.