After years of denial, Vitalik Buterin admits L2s aren’t “branded shards.” What that means for ETH, L2 tokens, and who’s who benefits now. Ethereum’s evolving role as L2s shift from “branded shards” to sovereign systems. (Credits: ChatGPT) Posted February 6, 2026 at 6:37 pm EST. Over the past week, Bitcoin fell from roughly $84,000 to a low near $60,000 before reclaiming the $70,000 level, one of the sharpest drawdowns the market has seen in years. ETH also dropped from $2,700 to nearly $1,800, but is now above $2,000. This piece isn’t about the crash itself, but periods like this tend to force a reset in how investors think about what they own and why — and Vitalik Buterin’s latest blog post about Ethereum’s direction sets a new tone for ETH. On Tuesday, Vitalik Buterin said the original vision of layer 2s as branded shards “no longer makes sense.” The post wasn’t a technical update so much as a concession. After years of treating L2s as Ethereum’s primary scaling path, Vitalik is now acknowledging what critics had argued all along: that L2s evolved into economically sovereign systems with incentives that do not always align with the base layer. For example, figures in the Solana ecosystem, including Max Resnick and Kyle Samani, have long warned that rollups siphon activity from L1 without reliably returning value and that Ethereum’s roadmap was utterly wrong. Ethereum largely ignored those views until the post-Dencun reality made them harder to dismiss. Dencun, a March 2024 upgrade, slashed rollup data costs and worked as intended, but it also accelerated the migration of activity off L1, weakening fee burn and the “ultrasound money” narrative. After that, many started questioning L2s, calling them “parasitic.” Vitalik’s post is the clearest acknowledgment yet that the old model is over. Ethereum no longer needs L2s as “branded shards,” as he called them in his blog post, and many L2s are “not able or willing” to meet those assumptions anyway. Now, what does this all mean for $ETH and other L2 tokens? In the rest of this article, we’ll move past protocol design and into market consequences: what this reframing means for L2 tokens , why generic rollups are facing a narrative reset , how Base benefits, which types of L2s (and tokens ) actually benefit from the world Vitalik is describing, what it means for $ETH . Why serious investors subscribe: Clear thinking during macro regime changes Fewer trades, better decisions Avoiding one bad allocation often matters more than finding one great trade