Ethereum co-founder Vitalik Buterin's recent critique of Layer 2 (L2) scaling solutions has prompted a significant response from key L2 projects, including Arbitrum, Optimism, Base, and Starknet. These projects are now reevaluating their strategies, moving away from simply offering cheaper Ethereum transactions to focusing on specialized use cases and functional differentiation. Optimism co-founder Karl Floersch acknowledged existing engineering challenges and emphasized a shift towards a modular L2 stack to enhance decentralization. Arbitrum's Steven Goldfeder defended the importance of L2 scaling, warning against the risks of "institutional migration" if the value of L2 is undermined. Meanwhile, Base, incubated by Coinbase, aims to differentiate itself by improving user experience and integrating privacy features, positioning itself as a "retail front-end" for Web3. StarkWare CEO Eli Ben-Sasson highlighted the potential of ZK-based L2s like Starknet to meet complex computational demands, aligning with Buterin's vision of specialized execution environments. This debate signals a shift in the Ethereum ecosystem towards a more functionally diverse and specialized landscape, as L2 projects seek to establish unique value propositions beyond cost efficiency.