Ethereum’s Layer 2 networks need “responsive pricing” to scale to billions of users and limit the fee fluctuations that still accompany congestion, Offchain Labs co-founder Edward Felten said during the keynote address at EthCC 2026.
Ethereum’s EIP-1559 update was launched in August 2021 as part of the London tough fork. It reformed the Ethereum fee market by modifying the gas fee cap and introduced a feature that burns part of the transaction fees, removing them permanently from circulation.
Felten said gas price fluctuations are still the main mechanism for keeping networks from being overwhelmed during periods of high demand, even though they create the type of rate variability that the mainstream tends to reject.
“[With responsive pricing]you can get more traffic at lower gas prices without putting too much strain on your infrastructure.”
Volatile gas prices have long been a barrier to mass adoption, especially for users accustomed to fixed or predictable transaction costs in traditional financial systems.
The issue matters because Ethereum’s scaling story is no longer just about increasing bandwidth. Increasingly, the question is whether Layer 2 networks can make transaction costs predictable enough for mainstream applications, while still pricing congestion fairly enough to protect infrastructure when demand is high. Arbitrum’s dynamic pricing launch is currently one of the first live tests of this compromise.
Arbitrum One is the first L2 to adopt responsive pricing
Arbitrum One adopted dynamic pricing in January. This described model as “the direction of the Arbitrum platform to make fees more predictable depending on demand by adapting prices to real network bottlenecks.”
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Felten shared multiple charts showing how Arbitrum gas rates remained lower during peak periods on the network than those on the Base network and other L2s using EIP-1559.
According to data from Arbitrum One, it is the largest L2 with $15.2 billion in TVL, while Base Chain Coinbase is in second place with $10.9 billion. data from L2beat. L2 lines secure over $39.7 billion in cumulative TVL, up 4.6% from last year.
While responsive pricing may be more scalable and more transparent about base costs, its biggest drawback is less predictability than EIP-1559, according to Julian Kors, senior developer and founder of workspace startup Pulsar Spaces.
The debate is not whether one model is better, but whether networks optimize for “predictability and purity of mechanism design, or efficiency and real-time cost adjustments. EIP-1559 does the former very well. Pliant pricing relies on the latter,” Cointelegraph said.
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Responsive pricing is a step forward, but the gas model needs to change
Jerome de Tychey, president of Ethereum France and EthCC, told Cointelegraph that responsive pricing could improve user experience by making fees more reflective of actual network demand.
Cyprien Grau, project manager at Gasless Ethereum L2 Status Network, agreed, calling the new pricing model “a real improvement in fee accuracy.” However, the model is still based on a “toll market”, which means users could still incur variable costs and spikes in fuel consumption during congestion, Cointelegraph said.
“It doesn’t solve the structural problem: L2 gas rates are heading towards zero as scaling on L1 and L2 improves and competition intensifies. Pliant pricing makes the decline smoother, but you’re still building a revenue model on depreciating assets.”
Grau added that flexible pricing is “the most advanced version of the gas model,” but said the gas model needs to be replaced. “L2s that can scale to billions of users are those where users don’t think about gas at all and where the economics of the network are not dependent on charging them for gas,” he added.
The fee model debate comes as parts of the Ethereum ecosystem are already rethinking the original packet-centric scaling thesis. In February, Vitalik Buterin argued that some of the assumptions of Layer 2 are no longer valid and that future scaling should rely more on the mainnet and native rollups.
L2 networks were created to scale Ethereum and offload some of the transaction load from the mainnet. However, Ethereum is reconsidering its L2-centric approach as these networks have siphoned significant economic value from the mainnet.
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