Ethereum launched in 2015 with an audacious vision: a World Computer — a single, unified execution layer where all decentralized applications would coexist in a shared state environment. Composable contracts, frictionless liquidity, and monolithic security.

That vision is dead.

The Ethereum of 2025 bears little resemblance to its original architecture. The network has undergone a fundamental pivot — from a monolithic execution layer to a modular settlement substrate. The “rollup-centric roadmap” is not merely an evolution; it is an architectural inversion. Ethereum no longer executes the majority of user transactions. Instead, it has become the “anchor” for dozens of Layer-2 solutions that perform the actual computation.

The Merge (2022) successfully established the Proof-of-Stake infrastructure. But that was only the foundation. The subsequent phases — The Surge (scaling via rollups) and The Scourge (addressing MEV) — have introduced a level of complexity that threatens the coherence of the entire system. In this audit, we will dissect Ethereum as a global settlement machine undergoing a “capital overhauling” while operating in a live production environment.

Ethereum’s security model, much like Bitcoin’s, relies on economic incentives. Validators are rewarded for guaranteeing consensus through block rewards and transaction fees.

The problem is that the rollup-centric path deliberately migrates execution away from L1. This creates a profound economic paradox:

• The Past: Users paid gas on L1 → Validators captured the revenue.

• The Present: Users pay gas on L2 → The L2 sequencer captures almost everything → L1 receives mere crumbs for settlement.

With data compression of 10x–100x, L1 revenue drops dramatically. If L2s capture 99% of fees, validator yields ($Yield_{validator}$) collapse.

Critical Vulnerability: If L1 becomes too “cheap” for settlements, validators will exit as yields fail to cover operational costs. This reduces the total stake, making a 51% attack on Ethereum significantly cheaper. Relying on ETH price appreciation to fix this isn’t engineering; it’s economic faith.

In March 2024, EIP-4844 was activated, introducing “Blobs” — a new data type for L2s that is not executed by the EVM but stored for 18 days.

This radically lowered costs for L2s. Previously, posting 1MB of data to calldata cost hundreds of dollars. With blobs, the price dropped 10x–20x. Theoretically, with all 6 blobs filled, the ecosystem can achieve:

The Catch: The blob market exists independently. If 50+ rollups begin competing for blob space simultaneously, a fee auction will ignite. Currently, the blob market is underutilized; this isn’t a sign of success, but an indication that real stress-test loads have yet to arrive.

Ethereum’s original value proposition was composability. Contracts could call each other atomically. Rollups destroyed this. We now navigate a “zoo” of isolated environments: State A (Arbitrum), State B (Optimism), State C (Base).

To move funds from L2_A to L2_B, one must either wait 7 days (Optimistic) or pay for complex, risk-prone bridges.

Liquidity is spread thin. Instead of a single $1B Uniswap pool on L1, we have three $300M pools on different L2s. The result: higher slippage and worse execution for the user. We have traded unity for cheap transactions within “walled gardens.”

The transition to PoS introduced a new centralization vector: MEV (Maximum Extractable Value). We split roles into Builders (who assemble blocks) and Validators (who propose them). The result? The top 5 builders construct over 80% of blocks.

Validators depend critically on MEV-Boost because the revenue from it far exceeds base block rewards. If a single builder dominates, they can:

1. Censor transactions.

2. Dictate terms to the entire network.

3. Manipulate consensus.

Attempts to implement Enshrined PBS (Proposer-Builder Separation) at the protocol level are merely band-aids. MEV is a fundamental property of blockchains; it cannot be removed, only redistributed.

Ethereum is searching for an exit from this fragmentation:

• Based Rollups: The idea is to let L1 validators sequence L2 transactions. It’s philosophically pure for decentralization but bad for UX (12-second finality).

• Enshrined L2s: Integrating L2 logic directly into the Ethereum protocol. This would turn Ethereum into a “complexity monster.” Any bug in an “enshrined” L2 could halt the entire network. This is architectural surrender — an admission that modularity failed.

In software engineering, complexity is the enemy of security. Ethereum’s architecture today requires an understanding of PoS, EVM, Blobs, KZG-commitments, MEV infrastructure, and dozens of L2 designs.

Ethereum’s history (The DAO, Parity bug) teaches us that catastrophes occur where complexity outpaces auditability. The rollup-centric roadmap exponentially increases the attack surface.

Conclusion: Ethereum is currently a massive, uncontrolled experiment on a live network securing hundreds of billions of dollars.

1. Has it become too complex? Yes.

2. Will validator economics survive? Uncertain.

3. Will fragmentation kill composability? Likely, yes.

This path is a high-stakes gamble that modularity is worth the loss of unity. Whether this gamble pays off will determine the fate not just of Ethereum, but of the entire concept of decentralized computation.

About the Author

Artem Teplov is a Technical Documentation & Protocol Specialist based in Los Angeles, CA. He specializes in creating highly accurate Whitepapers and performing technical Gap Analysis for complex DeFi protocols, ensuring full clarity on Tokenomics and risk mechanisms.

Need expert help with your protocol?

• X (Twitter): @Teplov_AG
  

Ethereum launched in 2015 with an audacious vision: a World Computer — a single, unified execution layer where all decentralized applications would coexist in a shared state environment. Composable contracts, frictionless liquidity, and monolithic security.

That vision is dead.

The Ethereum of 2025 bears little resemblance to its original architecture. The network has undergone a fundamental pivot — from a monolithic execution layer to a modular settlement substrate. The “rollup-centric roadmap” is not merely an evolution; it is an architectural inversion. Ethereum no longer executes the majority of user transactions. Instead, it has become the “anchor” for dozens of Layer-2 solutions that perform the actual computation.

The Merge (2022) successfully established the Proof-of-Stake infrastructure. But that was only the foundation. The subsequent phases — The Surge (scaling via rollups) and The Scourge (addressing MEV) — have introduced a level of complexity that threatens the coherence of the entire system. In this audit, we will dissect Ethereum as a global settlement machine undergoing a “capital overhauling” while operating in a live production environment.

Ethereum’s security model, much like Bitcoin’s, relies on economic incentives. Validators are rewarded for guaranteeing consensus through block rewards and transaction fees.

The problem is that the rollup-centric path deliberately migrates execution away from L1. This creates a profound economic paradox:

• The Past: Users paid gas on L1 → Validators captured the revenue.

• The Present: Users pay gas on L2 → The L2 sequencer captures almost everything → L1 receives mere crumbs for settlement.

With data compression of 10x–100x, L1 revenue drops dramatically. If L2s capture 99% of fees, validator yields ($Yield_{validator}$) collapse.

Critical Vulnerability: If L1 becomes too “cheap” for settlements, validators will exit as yields fail to cover operational costs. This reduces the total stake, making a 51% attack on Ethereum significantly cheaper. Relying on ETH price appreciation to fix this isn’t engineering; it’s economic faith.

In March 2024, EIP-4844 was activated, introducing “Blobs” — a new data type for L2s that is not executed by the EVM but stored for 18 days.

This radically lowered costs for L2s. Previously, posting 1MB of data to calldata cost hundreds of dollars. With blobs, the price dropped 10x–20x. Theoretically, with all 6 blobs filled, the ecosystem can achieve:

The Catch: The blob market exists independently. If 50+ rollups begin competing for blob space simultaneously, a fee auction will ignite. Currently, the blob market is underutilized; this isn’t a sign of success, but an indication that real stress-test loads have yet to arrive.

Ethereum’s original value proposition was composability. Contracts could call each other atomically. Rollups destroyed this. We now navigate a “zoo” of isolated environments: State A (Arbitrum), State B (Optimism), State C (Base).

To move funds from L2_A to L2_B, one must either wait 7 days (Optimistic) or pay for complex, risk-prone bridges.

Liquidity is spread thin. Instead of a single $1B Uniswap pool on L1, we have three $300M pools on different L2s. The result: higher slippage and worse execution for the user. We have traded unity for cheap transactions within “walled gardens.”

The transition to PoS introduced a new centralization vector: MEV (Maximum Extractable Value). We split roles into Builders (who assemble blocks) and Validators (who propose them). The result? The top 5 builders construct over 80% of blocks.

Validators depend critically on MEV-Boost because the revenue from it far exceeds base block rewards. If a single builder dominates, they can:

1. Censor transactions.

2. Dictate terms to the entire network.

3. Manipulate consensus.

Attempts to implement Enshrined PBS (Proposer-Builder Separation) at the protocol level are merely band-aids. MEV is a fundamental property of blockchains; it cannot be removed, only redistributed.

Ethereum is searching for an exit from this fragmentation:

• Based Rollups: The idea is to let L1 validators sequence L2 transactions. It’s philosophically pure for decentralization but bad for UX (12-second finality).

• Enshrined L2s: Integrating L2 logic directly into the Ethereum protocol. This would turn Ethereum into a “complexity monster.” Any bug in an “enshrined” L2 could halt the entire network. This is architectural surrender — an admission that modularity failed.

In software engineering, complexity is the enemy of security. Ethereum’s architecture today requires an understanding of PoS, EVM, Blobs, KZG-commitments, MEV infrastructure, and dozens of L2 designs.

Ethereum’s history (The DAO, Parity bug) teaches us that catastrophes occur where complexity outpaces auditability. The rollup-centric roadmap exponentially increases the attack surface.

Conclusion: Ethereum is currently a massive, uncontrolled experiment on a live network securing hundreds of billions of dollars.

1. Has it become too complex? Yes.

2. Will validator economics survive? Uncertain.

3. Will fragmentation kill composability? Likely, yes.

This path is a high-stakes gamble that modularity is worth the loss of unity. Whether this gamble pays off will determine the fate not just of Ethereum, but of the entire concept of decentralized computation.

About the Author

Artem Teplov is a Technical Documentation & Protocol Specialist based in Los Angeles, CA. He specializes in creating highly accurate Whitepapers and performing technical Gap Analysis for complex DeFi protocols, ensuring full clarity on Tokenomics and risk mechanisms.

Need expert help with your protocol?

• X (Twitter): @Teplov_AG