Ethereum co-founder Joseph Lubin has argued that the network’s future growth depends on global adoption and demand for its native token, ETH, rather than high transaction fees on the base layer. This discussion was sparked by ARK analyst Lorenzo Valente, who examined revenue distribution across Ethereum’s Layer-2 ecosystem using Robinhood’s recently launched blockchain as a case study.
Robinhood Keeps Most of the Revenue
According to Valente, Robinhood’s Layer-2 chain has generated about $816,000 in revenue since its launch. Under the current setup, most of that value stays with the Layer-2 operator, not Ethereum itself. Valente argued this reveals a key distinction in Ethereum’s investment thesis. If ETH is seen primarily as money and collateral securing the network, more companies building Layer-2s is a positive trend because it boosts Ethereum usage and demand for ETH. But if investors expect Ethereum to generate substantial fee revenue, the current model looks less attractive, as the economic value largely remains with Layer-2 operators.
Valente suggested Ethereum should capture a bigger share of network economics, proposing a model where Ethereum receives around 15% of revenue instead of a fraction of a percent. However, he didn’t specify how this might be implemented without disrupting Layer-2 growth.
Lubin: Low Fees Are a Feature, Not a Problem
Lubin disagreed with the idea that Ethereum should focus on maximizing Layer-1 fee revenue. Instead, he argued Ethereum should deliberately keep base-layer fees low to encourage broader adoption. According to Lubin, the network is entering a phase where tens of thousands of companies could build applications and infrastructure across Ethereum Layer 1, Layer-2 networks, and private Ethereum Virtual Machine (EVM) chains over the next two to three years. He believes Ethereum’s value lies in becoming the foundational settlement layer for a much larger blockchain economy, not in extracting fees from every transaction.
Lubin sees Ethereum’s long-term value coming from several factors working together. As more businesses move on-chain, more organizations will need to acquire and hold ETH to operate within the ecosystem. He also expects staking to continue locking away large amounts of ETH, reducing liquid supply. Combined with Ethereum’s token-burning mechanism, which permanently removes a portion of transaction fees from circulation, Lubin argues these dynamics could strengthen ETH’s scarcity over time—even if Layer-1 fees remain relatively low.
Ethereum’s Bigger Bet Is Global Adoption
Responding to questions about whether enough companies are capable of launching their own blockchains, Lubin pointed to the broader global economy. He noted there are hundreds of millions of businesses worldwide and argued blockchain represents the next evolution of the internet. Just as businesses gradually adopted websites over the past two decades, Lubin believes companies of all sizes will eventually move parts of their operations on-chain. In his view, Ethereum’s ecosystem—including Layer-2 networks and permissioned EVM chains—is best positioned to support that transition.
