Ethereum R1, a new layer-2 solution that doesn't feature any token and depends solely on donations

A group of Ethereum developers has launched a new layer-2 scaling solution called Ethereum R1, which will be funded entirely by donations and feature no token.

Announcing the launch on Monday, the project’s devs said that the L2 is grounded in credible neutrality, decentralization, and censorship resistance.

“General-purpose L2s should be commodities — simple, replaceable, and free from centralized dependencies or risky governance. Ethereum R1 is our answer to that call,” they said.

The project will not accept any venture funding, 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 launched the Dencun upgrade, which reduced fees for its existing L2 scaling solutions. But its base layer revenue had dwindled by nearly 100% by September of that year.

Furthermore, 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.

The Ethereum’s dominance and demand is picking up

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

Lately, 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 bought 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.