According to Vitalik Buterin on Twitter, Ethereum Layer 1 (L1) is instrumental in sequencing and validation processes, utilizing native state transition functions. The use of SNARKs and fraud proofs as proof systems highlights the security measures integral to Ethereum's Stage 2 rollups, reinforcing its position with Ethereum as the primary economic asset and fee token. Buterin emphasizes the importance of Ethereum's governance and security through decentralized data availability, enhancing its trading appeal.