A lot has happened across the Ethereum ecosystem recently, and it’s not just one isolated update, but rather a combination of protocol guidance, DAO decisions, infrastructure upgrades, and even some unexpected network issues.
At the heart of it all is a new chart from the Ethereum Foundation, which attempts to clarify things about how Layer 1 (L1) and Layer 2 (L2) will evolve in the future.
According to the institution, Ethereum’s L1 layer will continue to serve as the main settlement layer and core hub for DeFi. This part does not change. But what changes is how the L2s are placed.
Instead of simply scaling solutions, L2 layers are now expected to become more like specialized service layers, each offering something a little different.
The Ethereum Foundation is demanding stronger L2 standards and better ecosystem coordination
The institution did not stop at defining roles only. It also sets expectations.
L2s are advised to reach at least Stage 1 security standards and gradually move towards Stage 2. There is also a push towards simultaneous installation and something referred to as “native groups”, which indicates tighter integration with the underlying layer over time.
At the same time, the organization says it will continue to work on scaling the L1 itself, along with blobs, which, interestingly, are still only about 30% in use at the moment.
Another issue being highlighted is fragmentation. With so many chains and groups, the user experience across the ecosystem can feel scattered. The organization says improving cross-chain interaction is now a priority, which makes sense given how cross-chain things have become.
Defi and Daos protocols continue to evolve across the network
While the broader vision is being discussed, actual changes are also occurring at the protocol level.
The Aave DAO has approved ARFC’s proposal to deploy Aave V4 on Ethereum. The process now moves to an AIP vote, which is the next step before the final launch. It’s still a work in progress, but it shows that major DeFi protocols are continuing to build directly on top of Ethereum’s base layer.
Balancer Labs is also making a major shift. The team proposed closing its current structure and moving completely to a DAO model. This includes ending BAL emissions and directing all fees directly to the DAO treasury.
It’s a big change, especially for a protocol that’s been around for a while. Such moves suggest that some projects are leaning more towards decentralization and sustainability rather than relying on token emissions.
Ethereum’s infrastructure and scaling solutions continue to expand
On the infrastructure side, there’s also a lot going on.
Conduit has launched the G3, a new sequencer designed for high performance. It is capable of handling up to 10,000 transactions per second with a latency of around 10 ms. This kind of speed is clearly aimed at real-time onchain applications, an area that has been receiving more attention recently.
Katana also acquired the IDEX onchain perpetual platform, which adds another layer to the derivatives space on Ethereum.
Then there’s the upcoming Glamsterdam upgrade, which targets improvements in speed, scalability, and overall user experience. Details are still emerging, but it’s part of an ongoing effort to make Ethereum more efficient and easier to use.
Even smaller updates play a role. Privacy Pools recently patched a bug in the SDK and launched a major migration, which is a technical fix but is still important for users who rely on these tools.
Network activity, staking trends, and technical discussions continue
In addition to upgrades and launches, there are also ongoing discussions and community-led efforts to shape the ecosystem.
EthStaker has opened its 2026 public staking survey, which should give some insights into how validators and participants will approach staking this year.
Meanwhile, Ethereum Foundation researcher Tony Wahrstatter spoke on a more technical topic, saying that ePBS’s variable payload deadlines (the stipulated separation between bidder and builder) may not provide much benefit and may reduce deployment efficiency.
It’s the kind of behind-the-scenes discussion that doesn’t always get attention but still impacts how the network evolves over time.
Then there’s the hiring activity as well, with OctantApp currently looking for a social media lead, which is a small detail, but shows that the teams in the ecosystem are still building and expanding.
Market movements, network issues and large holdings highlight ecosystem activity
On the market side, there are also some notable movements.
Bitmine added another 65,341 ETH to its holdings, bringing its total to 4,660,903 ETH. This is a large amount and shows the ongoing accumulation on a fairly large scale.
However, it was not all smooth sailing. Arbitrum Sepolia recently experienced a partial outage due to a nitro-related issue that temporarily halted block production. The good news is that the network has since been restored and is operating normally again, with no user funds affected.
Moments like this serve as a reminder that even as the ecosystem grows, there are still technical challenges that pop up from time to time.
The Ethereum ecosystem continues to transform while maintaining the fundamental fundamentals
Taking a step back, all of these updates point to something bigger.
Not only is Ethereum scaling, it is reorganizing how different parts of its ecosystem work. L1s remain the core layer for settlement and decentralized finance, while L2s are slowly becoming more specialized and service-oriented.
Meanwhile, protocols evolve, infrastructure improves, and the community continues to experiment with new ideas.
It’s not a single change, but a group of small shifts happening at the same time.
Although things may seem a bit scattered at times, the general trend seems clear: Ethereum is trying to grow without losing its basic structure.
Disclosure: This is not trading or investment advice. Always do your research before purchasing any cryptocurrency or investing in any services.
Follow us on Twitter @themerklehash To stay up to date on the latest Crypto, NFT, AI, Cybersecurity, and Metaverse news!
