**Vitalik Buterin Proposes New Economic Model for Ethereum to Address Volatility**

Vitalik Buterin, Ethereum’s co-founder, recently expressed concerns about Ethereum's economic model on the X platform, highlighting a 'variance problem' in the current ecosystem. He noted the shifting focus over the past year, from discussions on Layer 1 (L1) extracting rent from Layer 2 (L2) solutions, to a reversal where L2 dominates.

Buterin emphasized the need for stability, advocating for an economic model that avoids drastic fluctuations in fees and taxes, which currently range from as low as 5% to as high as 95%. He proposed a model that ensures consistent fees for both L1 and L2, which would help reduce volatility and provide greater predictability for the Ethereum community.

He also stressed the importance of maintaining an ecosystem rooted in shared values, technical interoperability, and economic stability. Buterin pointed to initiatives like EIP-7762, rollup-based protocols, and fee-sharing models as key areas for future exploration, aimed at fostering a more cohesive and stable Ethereum economy.

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