Ethereum co-founder Vitalik Buterin has proposed a novel approach to achieve a thousandfold scaling of Ethereum's Layer 1 (L1) by creating new forms of 'state'. Buterin highlights that scaling state is more challenging than scaling execution and data. He suggests a practical path forward by moderately expanding the existing state while introducing new, extremely cheap but limited-use states. In the future, the current state tree will primarily store high-value objects like DeFi central contracts, while user-specific states such as ERC20 balances and NFTs will be managed by more affordable, restricted tools. Buterin believes it is feasible to develop abstractions that cater to over 90% of use cases.