From Fragmentation to Differentiation: New Ethereum L2 Strategies and the Rise of Native Rollups

Vitalik Buterin’s reflection on Ethereum’s scalability roadmap has recently become a major focus in the crypto community. His sharp comment—that the L2-Centric strategy set five years ago is no longer relevant—was initially seen as a rejection of L2, but what Vitalik actually proposed is a strategic correction: not ignoring L2, but redefining their roles and differentiation within the continuously evolving Ethereum ecosystem. A deep understanding of this position is essential to grasp where Ethereum is headed in 2026 and beyond.

When L2 Faces an Identity Crisis: Liquidity Fragmentation and Delayed Decentralization

In the early Rollup-Centric narrative, task division seemed simple: L1 handles security and data availability, while L2 is responsible for performance expansion and cost efficiency. When gas fees reached tens of dollars, this was the only rational answer. But the reality has changed.

Recent data from L2BEAT shows that the number of L2 solutions has surpassed hundreds. However, growth in quantity does not match progress in quality. Most L2s are still stuck in limited decentralization—referred to as “Stage 1” in the L2BEAT evaluation framework—where they rely on a centralized security council for upgrades and critical decisions. Since 2022, Vitalik has consistently criticized this “Training Wheels” architecture, emphasizing that dependence on human intervention conflicts with Ethereum’s core principles.

A more serious issue is liquidity fragmentation caused by the proliferation of L2s. Capital flows, initially concentrated on Ethereum, are now split into separate value islands. Each new L2 adds to this fragmentation, creating poor liquidity structures and reducing overall market efficiency. That’s why Vitalik emphasizes that the next step isn’t adding more L2s, but integrating existing ones more deeply.

When L2 Should Focus on Differentiation, Not Growth in Numbers

Ethereum’s new perspective isn’t a rejection of L2 but a strategic repositioning toward differentiation and specialization. Instead of pursuing broad expansion, each L2 should find a specific niche and deliver unique value that L1 or other L2s cannot provide.

Vitalik and Ethereum Foundation figures, including Wang Xiaowei from the Consensus 2026 conference, stress that L1 must remain the most secure settlement layer for the most critical activities. Meanwhile, L2 differentiation should include:

• Privacy and specialized computing: L2s offering privacy-focused virtual machines or infrastructure for AI agents
• Vertical specialization: Not all L2s need to be high-TPS clones but should focus on specific use cases
• Deeper integration: Not as “parasites” draining L1 but as organic extensions of the protocol

Understanding this differentiation shifts Ethereum’s expansion philosophy from “more chains are better” to “deep specialization is better.”

Based Rollup: When L2 Truly Integrates into Ethereum

In this reflection on the L2 narrative, the concept of Based Rollup or Native Rollup is expected to enter a growth phase by 2026. If five years ago the keyword was “Rollup-Centric,” now the question is more concrete: can rollups “grow from within Ethereum” rather than “depend on external layers”?

The fundamental difference between Based Rollup and traditional L2s like Arbitrum and Optimism lies in the sequencer. Traditional L2s run independent or centralized sequencers, whereas Based Rollup completely abandons this layer. Transactions are ordered directly by Ethereum’s L1 nodes, integrating rollup verification logic at the protocol level itself. The result is an L2 that appears native to Ethereum, inheriting resistance to censorship and L1 activity.

The biggest advantage of Based Rollup is solving the “composability sink” problem—within a single block, you can directly access L1 liquidity and perform cross-layer transactions atomically.

Pre-Confirmation: Bridging Security and Speed

However, Based Rollup faces challenges: following L1’s 12-second slot rhythm feels slow, and the system still requires about 13 minutes to reach full finality—too long for financial applications.

This is where Vitalik’s January 2026 proposal becomes relevant: combining pre-confirmation with Based Rollup to achieve synchronous composability. The structure is hybrid:

1. Sequential low-latency blocks are produced for responsive user experience
2. Based blocks are generated at the end of each slot
3. Based blocks are submitted to L1
4. Pre-confirmation mechanism ensures transactions will be included

In practice, pre-confirmation is a commitment from certain entities (like L1 proposers) that transactions will be included once officially submitted to L1.

This aligns with Project #4 in the Ethereum Interop Roadmap: Fast L1 Confirmation Rules. The goal is straightforward—cross-chain applications can receive “strong and verifiable” L1 confirmation signals within 15–30 seconds, without waiting 13 minutes for full finality.

The mechanism is elegant: fast confirmation rules are not a new consensus process but a reuse of validator voting that occurs each slot. When a block gathers enough votes from validators distributed across early slots, it can be considered “almost impossible to revert” under reasonable attack models, providing high certainty before full finality.

Application Differentiation: The Future of Ethereum Beyond TPS

As L1 infrastructure continues to strengthen and Based Rollups and pre-confirmation mature, the main bottleneck shifts from blockchain performance to user experience at the entry point—wallets and application integrations.

Ethereum is moving toward three meaningful directions of differentiation:

1. Native Account Abstraction
Ethereum is pushing for native Account Abstraction implementation, replacing EOA addresses and complex recovery phrases with smart contract wallets as default. Entering the crypto world will be as easy as creating a social media account.

2. Privacy and ZK-EVM
Privacy features are no longer niche. With the maturity of ZK-EVM technology, Ethereum will offer on-chain privacy protections for commercial applications while maintaining transparency—key differentiation in the competitive landscape of public blockchains.

3. On-Chain Sovereignty for AI Agents
By 2026, transaction initiators may no longer be humans but AI agents. The challenge is ensuring AI agents act according to user intent, not third-party control. Ethereum, as a decentralized settlement layer, becomes the most reliable arbiter of trust in the emerging AI economy.

Conclusion: From the Illusion of “Shards” to the Reality of “Native Rollups”

Is Vitalik truly “rejecting” L2? No. What he rejects is the narrative of excessive fragmentation—L2s isolated from the main network and each running independently. This is not the end of the L2 era but a new beginning.

The journey from the grand illusion of “separate shards” to refined Based Rollups and pre-confirmation actually reinforces Ethereum L1’s position as the global trust foundation. Differentiation does not mean fragmentation; it means meaningful specialization, where each layer has a clear role within a more cohesive ecosystem.

In the next era of exploration, only innovations rooted in the fundamental principles of Ethereum’s new phase and breathing with the mainnet will survive and thrive. This is the maturity Ethereum seeks—not limitless expansion, but focused differentiation.