L2 Is Booming, What About Ethereum?

2026.09.08
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Amid the commercial frenzy, re-examining the Rollup narrative and CROPS development roadmap.

Translated by: Saoirse, Foresight News

Supported by extensive public data and regulatory logic, this article offers a systematic reflection on the past few years’ “Rollup-centric” roadmap assumptions. Its core contribution lies in exposing a frequently avoided question: how should Ethereum position itself when L2 operators choose to remain in an intervenable state for their own benefit? Regardless of whether readers agree with its conclusions, the interest misalignment and boundary conditions raised in the text provide a verifiable framework for discussion. At the end, Ethereum community member Ryan Berckmans provides a contrasting perspective for reference.

The Paradox: L2 Commercial Success is Essentially a Failure for Ethereum

From a commercial metrics standpoint, various L2s have achieved massive success, even driving a resurgence in the Ethereum ecosystem.

Robinhood Chain stands out as the prime example, sparking a new round of discussions: whether and how Ethereum should adapt to the diverse demands of L2s. This leading global stock trading platform serves nearly 28 million users across 38 countries. It tokenized its core business into equity tokens, deployed them to self-custody wallets supporting over 120 countries, integrated with Uniswap on day one for 7×24 token trading, built a GonzoFi sandbox for developers, and allows users to deposit tokens into lending pools.

Other L2s are also developing rapidly. Base, operating within a publicly traded company’s ecosystem, has reached $14.42 billion in TVL; Arbitrum One holds $12.6 billion. The emergence of the Orbit and OP dev kits has simplified launching a public chain to mere procurement decisions.

This is no accident: operating an L2 is inherently a lucrative business. Just from this chain, Robinhood generates $3–4 million in daily on-chain revenue, not counting potential earnings from its trust token wrapping business (which underpins its equity token operations).

Given the booming commercial performance of L2s, people inevitably ask again: where exactly does the value of these L2s lie? And what does Ethereum get out of it?

L2BEAT categorizes L2s into several tiers. The most critical category is Rollups, which includes Robinhood Chain, Base, Arbitrum, and Optimism. Rollups are divided into Phase 0, Phase 1, and Phase 2. Only Phase 2 Rollups truly hand off final settlement to execute via Ethereum smart contracts. Phase 0 is mostly fully controlled by sequencer operators; Phase 1 is generally controlled by a security council holding multi-sig administrative rights. Despite various superficial designs meant to obscure these controls (e.g., some chains claiming “forced transaction inclusion”), operators retain absolute control over the entire chain; Ethereum can only help detect fraud but cannot enforce sanctions.

Several years have passed since Vitalik published the “Rollup-Centric Ethereum Roadmap” in October 2020 and proposed the phase classification standards in November 2022. Currently, only four chains truly bear the Phase 2 label: Facet ($661k TVL), Honeypot v2 ($1k TVL), Aztec (<$1k TVL), and Ethscriptions (no stats). Their combined TVL is less than $700k. In contrast, Base and Arbitrum One hold $14.42B and $12.6B respectively, both remaining at Phase 1. Robinhood Chain holds $2.9B, but its contracts can be upgraded instantly by an 8-of-7 multi-sig account. In case of a malicious upgrade, users have absolutely no withdrawal window; the fraud proof system only accepts proofs from two whitelisted entities; operators can censor any transactions without delay, including those touted as “forcibly included” (L2BEAT project page, 2026-09-07).

There is no reason to believe this status quo is temporary. In January 2026, Optimism co-founder Mark Tyneway wrote: “Phase 2 deviates from actual user demands. Everyone fears community backlash, so they dare not speak the truth.” He points out that the real “users” are chain operators themselves. They want a feature set that minimizes their legal risk, which often directly contradicts Phase 2 requirements. Imagine having to explain in court why you couldn’t pause a bridge contract, resulting in the theft of all user funds; or why you couldn’t prevent sanctioned North Korean entities from holding assets on your platform. The industry consensus is clear: virtually all enterprise-operated top L2s (like Robinhood, Base) will never evolve to Phase 2.

If the original intent of Rollups was to reach Phase 2, then this L2 vision has already failed. Even if L2s boast immense commercial success, the reality sounds jarring. Ethereum finds itself in an awkward position: it found product-market fit, but its clients are merely using Ethereum “incidentally and symbolically.” L2s treat Ethereum only as a fallback settlement layer, not as a truly implemented foundation. So where do we go from here?

The remainder of this article will detail the structural misalignment between Ethereum’s interests and the L2 market. Although L2s bring some revenue to Ethereum and ETH, this revenue is insufficient to justify making L2 the focal point of Ethereum’s R&D. Recognizing L2s’ dazzling commercial success while resisting the temptation to chase hype may be difficult, but it is absolutely necessary.

Four Channels Through Which L2s Return Value to Ethereum, and Why Only “True Settlement Rent” is

The value L2s bring to Ethereum flows through at most four channels:

1. Data Availability Rent: L2s purchase Blob data space. Blobs are essentially fungible commodities with alternative options available in the market: external DA layers or operator-run committees. Switching alternatives requires only configuration changes, no asset migration, and near-zero switching costs. More problematically, Ethereum has publicly committed to continuous scaling, which is the goal of its scaling roadmap. A commodity with ever-expanding supply and buyers who can switch at will cannot generate scarcity rent. Data confirms this. Over the 30-day period ending September 7, 2026, the largest L2 by TVL—Base—processed 292 million user operations but paid Ethereum only ~$8,800 in data, proof, and state update fees, averaging ~$290/day. During the same period, Arbitrum One paid only ~$2,700. By comparison, Robinhood Chain earns $3–4M daily but pays Ethereum only a few hundred dollars per day. Furthermore, on chains where users cannot freely exit, Blobs fail to deliver even their designed value. The original intent of on-chain data was to allow anyone to reconstruct the chain state and exit; operators uploading only hashes to L1 can still achieve rewrite resistance at a lower cost. No amount of Blob pricing optimization changes reality: Ethereum’s promise of abundant supply means it can never command premium/scarcity pricing.

2. ETH as Gas for Monetary Premium: This channel is entirely voluntary and non-mandatory. Operators can easily price fees in stablecoins, deploy custom gas tokens, or even subsidize fees to zero; the protocol cannot stop them. “ETH-L2” is largely a marketing construct with a faint “ETH as money” effect, which cannot generate stable revenue.

Multiple factors continue to erode this path. First, corporate operator financials are USD-denounced. ETH received by sequencers is merely working capital, not a long-term reserve. Coinbase has been accused of selling ETH fee revenue from Base but refuses to disclose fund flows. Public filings show that in Q1-Q2 2026, Coinbase’s investment ETH holdings shifted from 150,193 to 150,279 coins. Despite Base being the largest L2 by fees during this period, no significant ETH accumulation is visible. Second, L2 teams face constant pressure to issue native tokens: investors and employees need liquid assets to realize gains; products also require operator-controlled incentive mechanisms. Third, native tokens must define utility: commercially, tokens without use cases face zero demand; regulatorily, functionally active tokens are easier to defend against security classifications. The most logical function for L2 tokens is paying sequencer fees, and both the Orbit and OP dev kits natively support custom gas tokens. Every funding round further depresses the expected returns along this path.

3. Settlement Rights: Ethereum possesses a right that operators cannot revoke, exercised by L2 users. Among the four paths, only this one constitutes a property rights relationship rather than a simple buyer-seller transaction. Only through this path can Ethereum act as a franchisor/grantor rather than a mere supplier.

4. Brand Licensing: Namely, the “Secured by Ethereum” banner. Ethereum lacks trademarks or licensing bodies; this permission is granted free and irrevocably to everyone. For projects that already control traffic distribution, community consensus holds no sway. Even if Ethereum wanted to charge for this, the protocol pricing mechanism is uniform and undifferentiated, with no dedicated commercial department to negotiate with enterprises like Robinhood. An “authorization” that cannot be reclaimed and lacks pricing is essentially a gift, not a revenue stream.

Data availability rent and ETH-driven network effects are loose and unenforceable; brand licensing is entirely non-commercializable. Only when Ethereum achieves true final settlement can a structural, endogenous binding of interests be built, forming a moat. But true settlement capability only activates in Phase 2, while enterprise L2 operators subjectively reject Phase 2. This creates an irresolvable interest misalignment.

Without True Settlement, L2 and Ethereum Are Merely Mutually Beneficial, and Nothing More

Ethereum does capture small amounts of genuine DA revenue; millions of on-chain users hold and utilize ETH, generating a modest monetary premium; developers, capital, and attention that might otherwise flow to other public chains are drawn in; and it reaps reputation dividends: a brokerage launching an “Ethereum L2” signals to regulators that Ethereum is infrastructure, not contraband.

However, all aforementioned revenues are voluntary, revocable at any time, unpriced, and structurally fragile. This is precisely the meaning of “L2 treats Ethereum as an option.” It can at best amplify the influence of the ETH asset, but cannot amplify Ethereum the chain itself. Options hold immense value for holders; option issuers, however, only care about the premiums collected—in this case, the premium is zero.

Behind this dividend lies another side, which is the core motivation for large universal L2s willing to wrap themselves in L2 clothing: regulatory arbitrage. Stripping away the marketing veneer leaves a centralized ledger operated by a real-world entity, complete with pause buttons, transaction filters, and contract upgrade powers. If run openly, you are clearly a custodian or money transmitter, and regulators know it perfectly. But plug it into an Ethereum bridge, call it a Rollup, and you can leverage social consensus to claim Ethereum affiliation and sufficient decentralization, seemingly bypassing intermediary regulations, while the operator retains full traditional intermediary powers.

A common rebuttal: major L2s build L2s to cut costs. Then ask: what costs are being cut? Costs of achieving decentralization, or compliance costs incurred by avoiding it. Either way, it boils down to regulatory cost savings. Mark Tyneway’s post vocalized what many tacitly knew. He later admitted: many institutional L2s have a “mismatch between vibe and reality.” They are clearly not Ethereum, lack trustless neutrality, and are not trust-minimized; operators can switch rule versions at will. The label serves a legal function, not a cryptographic-economic one. Operators simply follow incentives, which is understandable.

Why Phase 2 Represents the True Critical Threshold

L2BEAT defines three hard requirements for Phase 2: ① a permissionless fraud proof system; ② users must have at least a 30-day withdrawal window upon malicious upgrades; ③ the security council can only address errors determinablete decentralized sequencers. Phase 2 constrains upgrade authority and user escape hatches, leaving transaction ordering and fee revenues untouched

Commercial Level: Phase 2 creates asymmetry. While the L2 chain itself can decouple from Ethereum, it can no longer abscond with user assets because users hold withdrawal rights that operators cannot eraseincrease “rent” without directly losing customers. Without it, Ethereum resembles a monthly contract supplier whose clients can switch alternatives at any time

Legal Level (the author’s professional expertise): Referencing FinCEN’s 2019 crypto guidance and US Code 18 U.S.C. §1960 precedents, the core determinant is whether an entity holds fully independent control over transmitted assets. As long as operators can filter transactions, freeze balances, or unilaterally upgrade bridge contracts without a withdrawal window, they maintain de facto complete control, regardless of how pristine the documentation appears. Conversely, implementing permissionless proofs, a 30-day exit window, and restricting security council powers solely to on-chain verifiable bugs gives operators ample grounds to claim they merely publish software, rather than conducting money transmission. Thus, the Phase 2 architecture is the strongest technical defense against being classified as a “centralized money service provider wrapped in Rollup clothing.” This explains why enterprises voluntarily abandoning Phase 2 warrants deep reflection, not just disappointment.

Governance Level: L2s lacking forced transaction inclusion cannot inherit Ethereum’s censorship resistance. They only inherit data availability and state roots, which merely expose operator misconduct but cannot reverse its consequences. Censorship occurs at the sequencer, where Ethereum’s properties effectively break off.

If Phase 2 became the industry default, “Secured by Ethereum” would represent a tangible legal relationship. The popular claim that “user assets remain safe on Base even if Coinbase fails” would transition from wishful thinking to reality. The truth is, Phase 2 has not become mainstream, with almost no prominent projects actually deploying it.

Why Phase 2 Fails to Materialize, and Community Pressure Cannot Solve the Root Problem

The true cost of Phase 2 to operators is the loss of operational discretion. A common misconception: Phase 2 strips sequencers of fee profits. False. Phase 2 restricts upgrades and enforces user escape mechanisms, but does not interfere with transaction ordering monopolies. Even running a fully centralized, highly profitable sequencer can satisfy all Phase 2 conditions while collecting every penny of fees.

What is genuinely lost is operational discretion. Regulated financial institutions must be able to freeze accounts per court orders, block addresses per OFAC lists, halt and reverse fraudulent transfers, emergency patch vulnerabilities before funds are drained, and name specific accountable persons during regulatory inquiries rather than shrugging. The Phase 2 architecture is fundamentally designed to strip away all these capabilities—which is precisely the core essence of Phase 2.

Consider a reductio ad absurdum: as long as operators retain account freezing capabilities, they fail the Phase 2 definition; if they abandon freezing capabilities, corporate legal counsel cannot approve, rendering the enterprise unable to fulfill legal obligations. Therefore, for operators holding broker-dealer licenses, money transmitter licenses, banking charters, or listed publicly, the set of Phase 2-compatible business models is an empty set—not merely small, but completely nonexistent.

Alternatively, imagine persuading Elon Musk to make X Money a Phase 2 Rollup instead of a Phase 0 chain disguised as an L2, a permissioned L1 with a small validator set (Hyperliquid model), or a standard database. How would you convince him? He trusts himself to manage user assets safely, and minimum-trust mechanisms hold no appeal for him; all options suffice. Under current legal frameworks, packaging a product as an L2 or building a few “independent validators” on a permissioned L1 avoids fines or imprisonment even if the chain is fully centralized; running an unlicensed database openly actually carries legal risks. Thus, blockchain implementation is necessary, but choosing a true Phase 2 Rollup is not. Users won’t vote with their feet either: Robinhood is Phase 0, Hyperliquid runs a permissioned validator set, yet users adopt them massively with excellent experiences. There is no leverage for persuasion. True Phase 2 fails to address buyers’ practical pain points, guaranteeing nobody will pay for it.

Constraints extend beyond licensing issues. Consider a counterexample worth pondering: Arbitrum holds no broker-dealer license, no banking charter, and is not publicly listed; governed by a DAO, it should theoretically be best positioned to relinquish intervention powers. Yet in April 2026, the Arbitrum Security Council passed an atomic transaction to upgrade the Inbox contract, temporarily implanting admin functions, initiating cross-chain messages in the victim’s name, transferring 30,766 ETH (~$71M) allegedly stolen by the Lazarus group to the governance treasury, and subsequently rolling back the upgrade. Nine of twelve council members approved the process, without court subpoenas, notifications, or hearings.

I agree with the outcome of recovering these funds and refuse to take a cypherpunk purist stance arguing we should let North Korean-affiliated groups keep stolen assets. However, the case itself is profoundly significant: the hypothetical courtroom scenario Mark Tyneway described months ago materialized in Arbitrum within just three months. No one wants to be the public chain standing idle while Lazarus drains $71M. Once Phase 2 is live, the protocol pre-commits to abandoning such intervention capabilities.

Real-world constraints far exceed licensing issues: as long as a project has reputation and assets to protect, it will fear various downstream repercussions.

The few Phase 2 projects exactly validate this logic: inscription chains, purpose-built honeypots designed to be attacked, protocol-native experimental projects, and Aztec (which launched Ignition mainnet running full Phase 2 specs). Aztec proves technical feasibility is entirely achievable. Yet these four chains lack significant commercial interests requiring real-world protection. Phase 2 only appears in scenarios where intervention capabilities cause more harm than good to operators. For privacy-focused public chains, intervention is a product flaw; for honeypots, it doesn’t matter; but anywhere there are licenses, boards of directors, or commercial reputations, these intervention capabilities serve as insurance no one wants to cancel.

(Note: Honeypot projects, cybersecurity traps used to lure and capture hacker attacks.)

This also explains why all community pressure tactics fail: publishing deadlines, community denouncements, or difficulty-bomb-like mechanisms that revoke Blob permissions for chains not advancing to Phase 1/2. These approaches frame the problem as shared goals thwarted by coordination failure. Coordination problems yield to pressure; fundamental interest conflicts do not. The externally visible “reluctance” is fundamentally legal teams identifying rigid compliance constraints and executing them diligently.

Four days after Tyneway’s post, Vitalik expressed a similar view in his February 3, 2026 blog post (largely ignored by most reports):

“I have seen at least one team explicitly state they may never want to move beyond Phase 1. This isn’t solely a technical reason related to ZK-EVM security; client regulations require them to retain ultimate control. For their clients, this may actually be the correct choice.”

This is the judgment of the roadmap’s originator. Obstacles stem from client regulatory demands; operators fulfilling these demands represents normal market delivery, which no amount of promotion can alter. Immediately following, he writes a conclusion aligning with this article: L2s taking this path are not “scaling Ethereum” as originally envisioned in the Rollup roadmap.

Native Rollups Cannot Rescue the Situation Either

Native Rollups solve Ethereum’s internal technical issues, not customer problems like Robinhood’s. Robinhood already possesses a chain meeting all business demands, including transaction interception capabilities; proof systems are not its pain point. Even with flawless native Rollup tech deployment, it cannot force enterprise adoption. Robinhood holds the choice, and after weighing ROI, a non-native chain masquerading as a Rollup benefits it more.

Furthermore, there is intermediate value leakage: Robinhood Chain is built atop Arbitrum’s commercial platform. In the value flow chain, Arbitrum competes with Ethereum, and Arbitrum likewise protects its own revenue. Structurally, these chains resemble L3s, where vast value is siphoned off by middleware before reaching Ethereum. Building a more sophisticated base layer for a partner rejecting the entire property rights regime amounts to an unofficial subsidy tied to a roadmap.

Independently funded chains willing to continuously purchase Ethereum DA services is undoubtedly positive; revenue is better than none. But the nature of this revenue must be recognized: it’s commodity supplier income. With ever-expanding supply and ample alternatives, it commands only ordinary supplier valuation, not franchisor valuation. Blob pricing itself is not wrong. Ethereum’s largest L2 pays only ~$290/day; the product design is inherently cheap, and alternatives are cheaper. Even skewing R&D resources to serve such clients won’t change the invoice amount.

Therefore, directly equating enterprise L2 business metrics with ETH fundamentals is a category error. Ethereum cannot force compliance or penalize client churn regarding the customer financials these metrics describe. Market narrative speculation can certainly drive ETH prices up, but that falls under market psychology, not fundamental accounting. We cannot reconstruct Ethereum’s economic model or abandon core work capable of compounding growth simply because Robinhood becomes trendy—such a shift would carry massive costs and constitute regression.

If Focus Shifts Away from L2, What Should We Prioritize? Ethereum Foundation’s Direction: CROPS

The surprising lesson from the previous cycle: avoiding legal risk does not necessarily require decentralization. Almost no one foresaw this, causing the target market for decentralization itself to contract. Yet a “sheltered niche segment” persists, analogous to GrapheneOS: while smaller than mass markets chasing ultimate UX, these users genuinely require the attributes delivered by decentralization rather than slogan-based marketing, and there are almost no other reliable suppliers in the market. A trusted niche supplier beats three competitors fighting over homogenous commodities. And this niche segment inherently belongs to Ethereum.

CROPS (censorship resistance, open access freedom, privacy, security) represents the core attributes these users truly pay for. Arguments for Ethereum investing re from an asset value perspective

Let’s identify which Ethereum capabilities wealthy rivals cannot replicate: throughput can be bought; EVM can be forked anytime; data availability is a standardized commodity; L2 dev kits can be procured off-the-shelf.

Truly irreproducible:a historical record of continued construction despite national-level crackdowns. In August 2022, OFAC listed Tornado Cash; in November 2024, the Fifth Circuit Court ruling in Van Loon v. Department of the Treasury determined immutable smart contracts do not constitute foreign national property under IEEPA, leading to the lifting of sanctions in March 2025. In August 2025, a jury convicted Roman Storm of conspiracy, with felony charges pending and prosecutors requesting a retrial. Amidst these storms, privacy and financial inclusion-related development never ceased. No other smart contract platform has endured comparable trials. Historical pedigree cannot be easily forked and copied—replicating it requires absorbing identical costs. Conversely, sequencer margins can be replicated by anyone with channels and capital.

Progress on the CROPS roadmap exceeds public perception. In February 2026, the Ethereum Foundation initiated a dedicated “Harden the L1” workflow centered on EIP-7805 (FOCIL), expanding Blobs and statelessness, embedding quantifiable censorship-resistance metrics into deliverables rather than leaving them as slogans. Kohaku released its SDK, allowing standard wallets to integrate RAILGUN mixing and generate independent addresses per DApp. Aztec Ignition mainnet launched, fully executing all Phase 2 features. The L1 gas limit increased from 30M to 60M in 2025, marking the first major hike since 2021; the Scaling Working Group aims beyond 100M. The Pectra upgrade doubled Blob throughput in May 2025; Fusaka’s PeerDAS boosts theoretical Blob capacity by 8x in December.

FOCIL waits for the Hegota upgrade to launch; integrating list functionality at the protocol layer awaits further forks; the privacy moat won’t be deemed fully mature until it’s ready-to-use out-of-the-box. Nevertheless, strategic direction and re compared to two years ago

The decisive characteristic lies in unilateral deliverability. Every item in the CROPS agenda can be executed and advanced by Ethereum’s existing developer base without requiring consent or cooperation from any partners. Conversely, tasks under the L2 collaborative agenda demand operators proactively relinquish certain powers; yet regulators, boards, legal departments, or pure reputational concerns mandate that operators retain these very powers. Under severely constrained resource conditions, abandoning a singly executable path to pursue dual-dependent solutions fundamentally bets that other entities will act against their own interests. This is mere wishful thinking, yet it demands engineering and R&D costs.

Boundary Conditions: Scenarios That Would Alter This Article’s Conclusions

Only if any of the following four scenarios materialize will my entire thesis be overturned:

1. Top 5 L2s by TVS (Total Value Secured, measuring the total scale of assets protected by protocols or custodians within Layer 2 networks) formally deploy Phase 2 without shrinking their TVL. Testnet promises or Phase 1 coupled with governance tweets don’t count. Requirements: permissionless proof systems, 30-day user exit windows, security council powers restricted solely to on-chain verifiable bugs, and TVL exceeding $1 billion.
2. US/EU regulatory frameworks tie custody responsibilities, asset control rights, and capital requirements to operator censorship/freezing capabilities. At that point, Phase 2 transforms from a compliance burden into a compliance dividend, completely flipping the incentive logic overnight. Among the four, this holds the highest real-world probability and warrants continuous observation.
3. Interest alignment manifests in cash flow, not public statements. Sequencer-based or native sequencing designs fundamentally bind L2 revenue to L1 proposers; defaulting triggers direct financial losses, not just reputational damage, granting Ethereum genuine enforcement leverage.
4. Building L2s yields unique product advantages unavailable elsewhere. Only chains settling truly to Ethereum enjoy specific cross-chain experiences and atomic composability. Relevant R&D exists currently, but hasn’t reached a tipping point where L2 operators would willingly sacrifice existing interests for it.

Unless any of these changes occur, the assumption of aligned incentives fails, rendering endless promotional rhetoric useless.

L2s prove that “sequencing + traffic distribution” is an excellent business. This does not imply it should become Ethereum’s business. Empirical evidence shows it cannot become Ethereum’s core enterprise: achieving such binding requires operators guarding commercial interests to proactively surrender capabilities essential for their survival.

The underlying assumption of the roadmap over recent years was that everyone would eventually reach Phase 2. Reality proves otherwise, and courage is irrelevant. L2s hold a freely obtained option on Ethereum settlement; holding the option yields high returns, eliminating any motive to exercise it. Ethereum gave away this option for nothing. Thus, we must stop treating L2 balance sheets as Ethereum’s balance sheets; we must stop designing protocols for clients paying only hundreds of dollars daily in service fees.

Good news: alternatives are already advancing without requiring anyone’s permission: L1 scales at its own pace; censorship-resistant work follows explicit timelines; privacy tools enter standard wallets; production-running Phase 2 chains prove technology was never the bottleneck. Ethereum should view L2 operators as welcome tenants, not hallucinate partnerships. Reality is exactly this, and it is entirely

Appendix: Comments on This Article from Ethereum Community Member Ryan Berckmans:

Excellent article, but I do not agree with Gab’s core conclusion. To briefly summarize his central thesis: bearish on the current L1+L2 model, particularly pessimistic about Ethereum (ETH). Below is my bullish counter-argument:

The primary reason for ETH’s current stagnation is that the vast majority of investors believe Ethereum L1 will ultimately fail to achieve global dominance, rather than other circulating narratives.

But most investors are misjudging, or haven’t grasped reality: Ethereum L1 will ultimately become the global dominant layer, at which point ETH’s market cap will reach tens of trillions of dollars. Reasons are as follows:

Gab, myself, and many others share a consensus: building L2s is an exceptionally sound choice for institutions like Coinbase and Robinhood. The L2 track will continue rapid expansion, a fact even acknowledged by ideological opponents.

• Continuous L2 expansion combined with L1’s organic growth will create this future landscape:
• L2s expand rapidly;
• L1 grows at an equally accelerated pace;
• L1 maintains its historical ~two-thirds share of the application capital market;
• L1 firmly secures near 99% market share as the foundational settlement layer for L2s. This logic ignores which developmental stage L2s occupy or how much fees they pay to L1; the core focus is simply: L1 is the structural hub of the entire system;
• Numerous mature, reliable L2 projects will emerge naturally, further solidifying L1’s global hub status;
• More L2 projects rivaling Base and Robinhood in scale will arise, including many rarely discussed initiatives: Sony’s Sonieum, Dubai enterprise-backed ADI Chain, Zksync (backed by a US bank consortium and other institutions currently arranging deployments). Once L1 hosts tens of trillions in application capital, ETH’s value naturally appreciates, driving its market cap into the trillion-dollar range.

That concludes my argument for why Ethereum L1 will achieve global dominance.

“Wait, you’ve only stated the Ethereum ecosystem will win, but haven’t explained why this translates to ETH token wins.”

Crypto friends, if you cannot fathom that an Ethereum ecosystem growing to this monumental scale inherently benefits the ETH token, then I have nothing else to say.

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