Ethereum L2s need a responsive price, says Offchain Labs
Ethereum's layer-2 networks need a “reactive price” to reach billions of users and still reduce the swings in payments that come with congestion, Offchain Labs co-founder Edward Felton said in a keynote at EthCC 2026.
Ethereum's EIP-1559 update launched in August 2021, as part of the London Hard Fork. It improved the Ethereum payment market by improving the gas payment limit and introduced a feature that partially incinerates transaction fees, permanently removing them from circulation.
Felton said gas-price volatility is still a key mechanism to prevent grids from being overloaded during times of high demand, even if this price volatility is rejected by consumers.
“[With responsive pricing]You can see more traffic at lower gas prices without increasing infrastructure.
Volatile gas prices have been a barrier to adoption for many, especially consumers accustomed to fixed or predictable transaction costs in traditional financial systems.
Ethereum's scaling history only matters because it adds more resource usage from now on. Whether or not Layer-2 networks can adequately predict transaction costs for core-style applications is becoming increasingly important. Arbitrage's dynamic pricing is now one of the first live tests of that trade.
Arbitrage One of the respondents to accept the price of the first L2
Arbitrum One adopted flexible pricing in January. He described the model as “an arbitrage platform orientation to make on-demand payments more predictable by aligning prices with real network bottlenecks.”
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Felton shared several charts showing how Arbitrum gas charges are lower at higher network sizes than other L2s charges based on base network and EIP-1559.
Arbitrum One is the largest L2 with $15.2 billion in TVL, followed by Coinbase's Base Chain with $10.9 billion, according to data from L2beat. L2s are earning more than $39.7 billion in accumulated TVL, up 4.6% from last year.
While responsive pricing can be more scalable and make underlying costs more transparent, its biggest disadvantage is less predictability than EIP-1559, says Julian Corse, senior developer and implementation at workplace startup Pulsar Spaces.
The debate isn't about whether one model is better, but whether networks favor alignment for “prediction and method design purity, or efficiency and real-time cost. EIP-1559 does the former well. Responsive pricing leans toward the latter,” he told Cointelegraph.
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Responsive pricing is a step forward, but the gas model needs to be replaced
Jerome de Taiche, president of Ethereum France and ETCC, told Cointelegraph that responsive pricing could improve user experience by making payments more closely reflect actual network demand.
Cyprin Grau, project leader at the gas-free Ethereum L2 Status Network, agreed, calling the new pricing model a “real improvement in payment accuracy.” However, the model is still based on a “payment market”, which means that users may still experience fluctuating costs and gas congestion, Cointelegraph said.
“It doesn't solve the structural problem: L2 gas charges tend to go to zero as L1 and L2s scale up and competition gets tougher. Responsive pricing eases the decline, but you're still building a revenue model on an expensive asset.”
Grau added that Responsive Price is “a much more advanced version of the gas model,” but the gas model needs to be replaced. “L2s that deliver to billions of users will be where users never think about gas and the economics of networks don't depend on charging for them,” he said.
The payment model debate comes as parts of the Ethereum ecosystem are rethinking the original package-oriented staking thesis. In February, Vitalik Buterin argued that some assumptions about layer-2 no longer hold and that future scaling should rely more on the core network and native rolls.
L2 networks were created to scale Ethereum and offload the transaction load from the main network. However, Ethereum is now rethinking its L2-centric approach as these networks have shown greater economic value than the main network.
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