According to a recent CoinDesk report, analyst Margaux Nijkerk highlights that the Ethereum Layer 2 (L2) ecosystem is entering a deep phase of consolidation after years of explosive growth. While not all L2 projects are in decline, many general-purpose chains appear to be losing their reason for existence, with clear signs of accelerated natural selection.
Last month's shutdown of Zero Network became a landmark event, immediately sparking heated debate within the industry regarding the overcrowding of L2 networks. Ethereum co-founder Vitalik Buterin also publicly urged developers to reconsider the network's long-term scaling roadmap. Although the barriers to deploying new chains have dropped significantly, attracting and retaining users remains an insurmountable challenge for most L2 projects.
TVL Highly Concentrated: Base and Arbitrum Dominate
Current data shows that on-chain activity and capital within Ethereum L2 are overwhelmingly concentrated in a few top networks. Base and Arbitrum together account for over 80% of the total value locked (TVL), creating a pronounced winner-takes-all effect, while dozens of other L2 chains share the remaining less than 20% of liquidity. This landscape indicates that general-purpose chains lacking differentiated features and a solid ecosystem foundation are seeing their living space rapidly shrink; without a unique positioning, they risk being phased out.