Ethereum’s scaling landscape is undergoing a radical realignment: a New Layer-2 Enters the Arena Without a Token, VC Backing, or Centralized Control.
On May 1, a group of independent developers from the Ethereum community introduced Ethereum R1, a new Layer-2 rollup solution that breaks from nearly every norm currently shaping the rollup sector.
In a space crowded by VC-backed L2 chains that operate more like profit-driven Layer-1 blockchains, Ethereum R1 is a quiet revolution - 100% donation-funded, token-free, and governed by the community, not corporate boards.
With no presale, no airdrop promises, and no protocol token to speculate on, R1 represents an ideological counterpoint to the trajectory most rollups have followed since Optimism and Arbitrum pioneered general-purpose L2s. It offers a new answer to a recurring question: How can Ethereum scale without selling out its principles?
What Ethereum R1 Is - And What It’s Not
Ethereum R1 is a zero-token, general-purpose rollup built using the Surge stack from NethermindEth and the Type 1 zkEVM codebase from Taiko. According to its developers, R1 is designed to scale Ethereum while maintaining full alignment with the network’s founding ideals: credible neutrality, censorship resistance, decentralization, and replaceability.
The project’s creators are clear about what R1 is not:
- It’s not a venture-backed chain.
- It does not issue a governance token.
- It does not seek profit.
- It does not implement private allocation or maintain opaque corporate governance.
Instead, the initiative is 100% funded by donations and contributions from the Ethereum community. A portion of transaction fees - 1% - is routed to the Taiko DAO until 2030 to support the underlying codebase, after which all fees will be permanently burned.
“Ethereum R1 is not here to compete with Ethereum or replace other L2s. It’s here to demonstrate that another model is possible - one that sees rollups as public infrastructure,” the developers wrote on X.
Why Stage 2 Matters
Perhaps one of the most notable aspects of R1’s launch is that it enters “Stage 2” of Ethereum rollup development from day one.
Ethereum’s roadmap, particularly in the post-Merge era, envisions rollups maturing through three defined “stages”:
- Stage 0: Minimal decentralization, centralized sequencer and proving, limited fraud/ZK proving.
- Stage 1: Partial decentralization with some permissionless components, but centralized fallback remains.
- Stage 2: Full decentralization: permissionless proving, censorship resistance, robust governance, and long upgrade delays.
By launching at Stage 2, R1 immediately supports permissionless proving, has no centralized upgrade keys, and operates under a community multisig governance structure.
While many leading L2s have delayed decentralization for years, this choice positions R1 as a direct challenge to what its developers call “L1-in-disguise rollups.”
A Reaction to Centralization in L2s
Ethereum R1’s architecture is a direct response to a growing concern: that many L2s now act less like extensions of Ethereum and more like independent L1s with Ethereum bridges.
Projects like Optimism, Arbitrum, Base, and Blast have introduced native tokens, incentivized liquidity programs, VC allocations, and opaque upgrade policies. While technically "rollups," they often hold admin privileges that allow for unilateral upgrades, pauses, or backdoor control. Some critics argue that this compromises Ethereum’s broader decentralization and creates systemic risk.
The Ethereum R1 team explicitly critiques this dynamic:
- “General-purpose L2s should be commodities - simple, replaceable, and free from centralized dependencies or risky governance.”
- Rather than maximizing profit, R1 seeks to minimize attack surfaces and dependency chains. The rollup is built to be “fungible and forkable” - easy to replace, hard to corrupt.
The Infrastructure: Surge Stack and Taiko Code
Technically, Ethereum R1 is built atop Nethermind’s Surge stack - a rollup framework that prioritizes open architecture and flexibility. It borrows heavily from Taiko, one of the most respected zero-knowledge Ethereum Virtual Machine (zkEVM) projects in the ecosystem.
Notably, the project allocates 1% of its base fee to the Taiko DAO until 2030. After that, R1 will burn all fees, preventing value accumulation at the protocol level and ensuring neutrality.
This design echoes Ethereum’s own transition to EIP-1559 and ultrasound money principles, where burning fees aligns the protocol with long-term sustainability over short-term profit.
Community First: Transparency and Open Collaboration
Another cornerstone of Ethereum R1 is its commitment to open development. The team has no central legal entity, no foundation, and no private board. It encourages community involvement through:
- Telegram for contributors
- GitHub for code collaboration
- Magician Forum for governance discussion
The decision-making process is designed to be deliberative and transparent, with long governance upgrade delays to ensure protocol-level changes are slow, well-reviewed, and non-disruptive.
A Philosophical Alliance with Ethereum's Ethos
The release of Ethereum R1 has drawn attention from several prominent figures in the Ethereum ecosystem.
Ethereum Foundation researcher Justin Drake and Ethereum co-founder Vitalik Buterin have both interacted with the project. Drake in particular has emphasized the importance of rollups behaving as neutral utilities, not new L1s competing for dominance.
Buterin has long expressed concern about the “L1-maxi” tendencies of some rollups. In blog posts and interviews, he has advocated for a modular Ethereum where rollups act as interchangeable and non-capturing extensions of the base layer - not economic islands seeking dominance.
In that light, Ethereum R1 feels less like an anomaly and more like a return to form.
The Broader Context: L2 Fragmentation and Risk
Ethereum’s scalability roadmap has succeeded in pushing significant activity off-chain. As of Q2 2025, Layer-2s collectively account for over $30 billion in total value locked (TVL) and have exceeded $10 billion in weekly transaction volume.
But this growth has come at a cost. The rise of tokenized rollups has fragmented liquidity, split developer resources, and introduced new vectors for governance capture.
In recent months, the following trends have sparked concern:
- Centralized sequencers with rollback authority
- Token-driven governance with low participation
- Conflicts of interest between profit-seeking L2s and Ethereum’s core mission
- Increasing reliance on L2 bridges, which remain high-value targets for hackers
In that environment, Ethereum R1’s entry offers a new model - one focused on coordination, not competition.
Can a No-Token Rollup Succeed?
The obvious question is sustainability. Can a donation-based rollup survive in a space where attention and capital follow incentives?
The Ethereum R1 team believes the answer lies in trust-minimized infrastructure and slow, organic growth. With no pressure to generate returns or launch a governance token, R1’s model relies on:
- Community contributions
- Public goods funding
- Minimal operational overhead
It's a gamble, but not an uncalculated one. Public goods projects like Ultrasound.money, Flashbots, Geth, and MEV-Boost have thrived without tokens, often via Gitcoin grants and EF sponsorships.
Moreover, as Ethereum matures, there's growing recognition that the next generation of infrastructure may require non-extractive models to preserve the network’s neutrality and integrity.
A Small Rollup With Big Implications
Ethereum R1 may not dominate TVL charts or launch a token with explosive upside, but that’s not the point. Its very existence challenges prevailing assumptions about what rollups should be and who they should serve.
In a sea of financialized L2s, R1 is an ideological lighthouse - a reminder that scaling Ethereum doesn’t have to mean selling it off.
The coming months will determine whether the community is ready to support such an experiment. But whatever the outcome, Ethereum R1 has already succeeded in re-centering a conversation long overdue: how to scale Ethereum without losing Ethereum.