New Ethereum R1 Layer-2 Protocol Aims to Redefine Scalability

Following the Ethereum’s new EIP-7907 upgrade previously highlighted by Crypto News Flash (CNF), currently, a team of independent developers launched Ethereum R1. It distinguishes itself by eschewing a native token, venture capital funding, and pre-mined allocations. This minimalist design aims to uphold Ethereum’s core principles of decentralization and neutrality.

In a May 1 announcement, the developers in their statement about general-purpose L2s emphasized the simplicity, replaceability, and being free from centralized dependencies or risky governance.

"General-purpose L2s should be commodities — simple, replaceable, and free from centralized dependencies or risky governance."

Ethereum R1 is our answer to that call.

The rollup grounded in credible neutrality, decentralization, and censorship resistance.

— Ethereum R1 (@ethereumR1) May 1, 2025

In market view, this approach is considered to be in contrast with many existing L2 solutions that often involve complex governance structures and token economies.

The Impact of the Dencun Upgrade on Layer-2 Solutions

Ethereum’s Dencun upgrade, implemented on March 13, 2024, has significantly enhanced the scalability and efficiency of the network. By introducing “blobs” for data storage, the upgrade has reduced transaction costs on L2 networks by up to 90%, making Ethereum more accessible for everyday use.

This development has paved the way for innovative L2 projects like Ethereum R1 to thrive without imposing additional financial burdens on users.

According to some report, the proliferation of L2 solutions has led to a dynamic yet fragmented ecosystem. While these networks offer enhanced scalability, they also introduce complexities related to liquidity and user experience.

Ethereum’s Market Position

As per last CNF ETH price analyses, Ethereum’s active wallets was reported to be increased by 9.5%, while the price increased by 24% from local lows.

In this article, we have learnt that Ethereum R1 represents a bold step towards a more decentralized and efficient blockchain ecosystem. By eliminating the complexities associated with native tokens and centralized governance, it aligns closely with Ethereum’s foundational principles, offering a promising path forward in the ongoing evolution of blockchain technology.

Despite short-term market fluctuations, the long-term outlook for Ethereum remains positive, bolstered by advancements in L2 technologies and increased institutional adoption, according to Gate.io.

According to IcoHolder, investment firm VanEck projects that Ethereum’s L2 networks could reach a market capitalization of $1 trillion by 2030, underscoring the significant role these solutions play in Ethereum’s scalability strategy.

As of now, Ethereum (ETH) is trading at approximately $1,838.51, reflecting a 1.71% increase in the past day and 3.87% in the past week.