Ethereum’s Layer 2 reliance criticized by Polkadot CEO

Ethereum’s economic model has come under scrutiny from Max Rebol, Polkadot’s Head Ambassador and CEO of Harbour Industrial Capital. Rebol has expressed concerns about Ethereum’s increasing reliance on Layer 2 networks, arguing that these secondary chains, while benefiting from Ethereum’s security, do not adequately contribute back to the ecosystem. This situation, according to Rebol, exemplifies the free rider problem, where participants exploit shared resources without making fair contributions. As Ethereum pushes for scalability through Layer 2 solutions, its mainnet fee market may be weakening as transaction volume shifts off-chain.

This criticism comes at a challenging time for Ethereum, which has struggled to gain traction in 2025. Its price performance has lagged behind Bitcoin and emerging competitors like Solana and Polkadot. The Pectra upgrade, aimed at enhancing throughput and improving staking flexibility, has not yet resulted in significant market gains. Ethereum’s internal governance issues, including fragmented decision-making and competing developer priorities, may also be hindering its progress. Rebol believes that the Layer 2 model dilutes the mainnet’s economic engine, making Ethereum vulnerable in the long term.

In contrast, Polkadot takes a different approach to scalability. Its unique parachain architecture allows multiple blockchains to run in parallel, each tailored for specific applications. These chains share security through Polkadot’s central relay chain, creating a unified yet flexible environment. Rebol highlights that this structure avoids the Layer 2 dependency that Ethereum faces and provides a clearer path to sustainable scaling. He also notes that Polkadot’s governance system facilitates smoother upgrades and better community coordination, offering resilience against internal disputes that often slow down Ethereum.

Harbour Industrial Capital, Rebol’s investment firm, has reportedly achieved triple returns during the ongoing bear market. The fund’s success is attributed to its strong focus on Polkadot-based projects, reinforcing Rebol’s confidence in the network’s long-term value. As traditional Layer 1 chains compete for developer talent, Rebol believes that Polkadot’s model is better positioned to support serious use cases in decentralized infrastructure, gaming, and enterprise deployment. His critique of Ethereum’s current trajectory is not just competitive but structural, pointing toward a need for blockchain networks to rethink their economic incentives alongside their technical goals.

Rebol’s statements have reignited the broader debate about blockchain design philosophy. While Ethereum remains the dominant smart contract platform, challengers like Polkadot are shaping new paradigms. The sustainability of Ethereum’s Layer 2 ecosystem will depend on whether it can align incentives between its core chain and its expanding network of rollups. Meanwhile, the rise of modular blockchains and interoperable ecosystems may pressure Ethereum to evolve or risk losing ground. As the crypto market matures, the competition will not just be about throughput or fees, but about who can build systems that economically reward participation while maintaining decentralization and usability.