Ethereum R1 layer-2 scaling solution launches, promising to be token-free

Ethereum developers have launched a new layer-2 solution, the Ethereum R1, which will not feature any token and depends solely on donations.

The project’s devs commented on the launch: “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 roll-up grounded in credible neutrality, decentralization, and censorship resistance.”

ETH transaction fees dropped to its lowest in five years in April

They claimed that most current L2s work more similarly to new L1 projects than scaling solutions with private allocations, opaque governance, and centralized control.

Lately, users have also raised concerns about how Ethereum L2 projects have drifted from the main interests of the base layer.

The Ethereum R1 is a way to address all those issues, with the project team mentioning that it will neither have venture funding nor any pre-mined token allocations or a governance token.

The network had started to lay ground for new L2 projects much earlier. In March 2024, they released the Dencun upgrade, which reduced fees for its existing L2 scaling solutions. However, its base layer revenue had dwindled by nearly 100% by September of that year. Moreover, transaction fees on its base layer have continued to sink, reaching a five-year low of $0.16 per transaction in April 2025, primarily driven by reduced demand for block space.

Some analysts have hinted that L2 growth incentives caused the base layer revenue declines, asking the network to reconsider its options.

Ethereum’s dominance and demand is picking up

In the past few months, the demand and relevance among new users for the ETH network dropped. However, according to Growthepie, there was a 62% rise in active addresses week-on-week and another 57% surge in Layer 2 dominance.

Recently, ETH had the highest market sentiment with 82%, while Solana and Bitcoin followed at only 3.6% and 2.7% respectively.

In addition, Loookchain reported that crypto whales have been rushing to purchase ETH. In the last few hours, they acquired 5,362 ETH for over $7.2 million. One trader with the address ‘0xDdb4’ received a loan from Aave, about $3.44 million USDC from Aave, and purchased 1,856 ETH.

Another whale, ‘0xf84d’, borrowed $1.64 million USDC, topped it up, and bought 1259 ETH with $2.34 million USDC. The other trader, ‘0x69D0’, took up 2,250 ETH worth around $4.12 million from the Binance crypto exchange.