Ethereum’s Layer-2 Strategy — A Double-Edged Sword

[kevin1]

Ethereum’s scaling model, built around layer-2 networks, has reduced congestion but also shifted activity away from the main chain.

Research from Binance highlights this as a double-edged sword:

Layer-2s like Arbitrum, Optimism, and Base make Ethereum faster and cheaper.

But they also cannibalize fees from the layer-1 network, eroding base-layer revenue.

Low gas prices reflect this shift — Ethereum remains dominant, but the economic balance between layers is becoming harder to maintain.

[Rimon Khan]

L2s are scaling fast, but fragmentation and liquidity splits are real challenges. 🧠

[Nahid Hossen]

Cheaper transactions are great — but at what cost to decentralization?

[JanEmil]

Staking rewards are not paid by the fees.