Ethereum’s Scaling Crisis? Low Gas Fees Expose Layer-2s Losing Relevance

Key Takeaways

• Ethereum’s scaling crisis is becoming more apparent as on-chain gas fees fall to a five-year low.
• Developers are shifting their focus from Ethereum Layer-2s to more scalable Layer-1 blockchains like Solana.
• The Ethereum ecosystem is experiencing significant leadership changes during this downturn.

As service-oriented blockchains scale rapidly, Ethereum finds itself in a deepening scaling crisis.

The once-popular blockchain’s troubles have been laid bare, with gas fees plummeting to their lowest levels in five years.

This decline is signaling that Ethereum L2s, once hailed as the solution to scalability issues, are losing traction as alternative blockchains like Solana surge in popularity.

Ethereum’s Layer-2 Crisis Exposed

Ethereum’s diminishing popularity is underscored not just by its price action but also by the sharp drop in on-chain gas fees.

At a time when Ethereum L2 solutions were expected to alleviate scaling bottlenecks, the reality seems different. Gas fees have now reached a five-year low, dipping below one gwei—an indicator of reduced on-chain activity.

Qiao Wang, a contributor to Alliance DAO and a vocal critic of Ethereum L2s, made his stance clear: recommending Ethereum’s L2 solutions over competitors like Solana is “irresponsible.”

In an interview , Wang explained that startups are consistently finding more success on Solana, where products launched on Ethereum’s L2 solutions often struggle to gain users.

The Ethereum L2s simply aren’t attracting the traction they need, especially as Solana and other blockchains continue to outperform Ethereum in scalability.

Ethereum gas fee touches 5-year low. Source: Etherscan.

“It’s very clear at this point that you have to be on Solana,” Wang said, pointing out that developers are moving to chains with exponentially higher processing speeds.

The Ethereum scaling problem—one of the longest-running debates in the crypto world—continues to overshadow the Ethereum ecosystem , and now the evidence is showing in the most telling way: Ethereum’s gas fees.

L1 Blockchains Gaining Ground

While Ethereum once led the charge with innovative scaling solutions, developers are increasingly turning to L1 blockchains like Solana and Sui, which offer superior scalability.

Ethereum’s struggles with scaling and L2 adoption come at a time when the broader blockchain ecosystem is thriving.

Meanwhile, Ethereum’s L2 chains are seeing declines in activity , even during periods of bullish market trends when other L1 blockchains are reaching new highs.

This shift comes as Ethereum continues to grapple with leadership changes within its foundation.

Vitalik Buterin, Ethereum’s co-founder, has outlined a new roadmap that seeks to focus on both scaling L1 and L2 solutions while making the ecosystem more developer-friendly.

However, despite these efforts, Ethereum’s on-chain activity has dropped to new lows in early 2025, and its price has struggled to keep pace with Bitcoin’s recent momentum.

The Road Ahead for Ethereum

As the scaling crisis deepens, the Ethereum ecosystem faces a critical moment. Developers are clearly looking beyond Ethereum L2s.

Whether Ethereum can regain its momentum will depend on how well its new roadmap addresses scalability issues and whether it can provide the developer-friendly environment it desperately needs.

For now, Ethereum’s gas fees reflect a broader trend of declining activity, signaling that the L2 crisis may only worsen before it gets better.