Ethereum cofounder Vitalik Buterin said the next step for Ethereum after “The Merge” is scalability, speaking to Circle chief executive officer Jeremy Allaire at Circle’s Converge22 conference.

The most important problem for Ethereum to address after the blockchain’s long-awaited Merge from proof of work to proof of stake is scalability, Vitalik said. “I think that it’s important to keep hammering on scalability as an issue, because it is really central to the problems that are preventing a lot of the cryptocurrency and blockchain applications that we dream of going mainstream.”

Vitalik noted that before the bear market drove down transaction fees, many Ethereum transactions cost as much as US$5 or more. High costs are why users often opt to interact with cryptocurrencies through exchanges like Binance that offer cheaper and faster transactions rather than directly through the blockchain.

Through scalability and making it possible for the chain to process much more data, Vitalik hopes to make interacting with the Ethereum blockchain directly more attractive. One way is through “layer 2 projects” that live on top of Ethereum.

The Merge has made it easier to build these “second layer platforms,” which are more scalable, Ethereum-like networks that use the blockchain in a more “optimized and more intelligent way,” thus lowering costs, Vitalik said.

There are also upgrades to the Ethereum chain itself coming into focus post-Merge. One is “sharding,” a multi-phase upgrade expected to improve Ethereum’s scalability and capacity and enable layer 2 solutions to offer low transaction fees while leveraging the security of the base Ethereum network.

“The Ethereum ecosystem’s ability to absorb and process transactions will increase by a factor of something like 100 to 1000, and so that’s going to be a big deal,” Vitalik said.

Given the applications already possible today, at 30 cents to US$3 a transaction, think about what kind of applications will be possible at about 0.3 to 3 cents a transaction, Vitalik proposed to the audience.