Increasingly more firms are drawn to the concept of launching their very own Ethereum layer 2 community. Most of them shouldn’t hassle. There’s already a staggering variety of them — over 150. Fairly a couple of of those are centralized and linked to a single enterprise and a number of other firms resembling Robinhood have just lately introduced plans to launch their very own layer 2 networks.
The sights for launching an Ethereum layer 2 community are important, particularly when in comparison with launching your individual layer 1 (basis layer) blockchain. Layer 1 networks should compete with networks like Ethereum and Solana in an already intensely aggressive and crowded market. Layer 2 networks that run on prime of Ethereum additionally face an intensely aggressive market however can concurrently draw upon the energy of the Ethereum ecosystem, because of deep integration into Ethereum itself.
With Ethereum having turned 10 in July, it stays the dominant sensible contract blockchain and it’s the largest single dwelling for digital belongings, real-world belongings (RWA), stablecoins and decentralized finance functions. Ethereum’s share of the general decentralized finance ecosystem has been secure at about 50% for 3 years now. When layer 2 networks are included within the complete, it seems to be rising modestly.
The temptation to launch your individual Ethereum layer 2 community is straightforward to know — they appear to be a helpful idea with nice economics. A layer 2 community on prime of Ethereum provides a little bit of “better of each worlds” performance: you may management your individual ecosystem inside your layer 2 however retain integration with and entry to the general Ethereum ecosystem. Centralized layer 2 networks can set their very own value constructions and have almost all the identical controls as a stand-alone non-public blockchain resembling deciding who has entry to the community and how much information might be seen to others.
This comes with a price. Layer 2 networks should buy transaction processing area on the Ethereum mainnet to finalize their transactions (often known as blob area) — however these prices are more likely to be decrease than these related to beginning a community from scratch and competing head-on with Ethereum. In truth, based on Token Terminal, the prices of growing a layer 2 are remarkably low. For Base, a layer 2 community run by Coinbase, throughout June of 2025, the community generated $4.9 million in price income and spent simply $50,000 on layer 1 settlement charges.
Certainly, the layer 1 settlement charges on Ethereum are so low they’ve set off a fiery debate inside the community ecosystem about whether or not they’re too low, and that layer 2 networks signify a switch of advantages from layer 1 stakeholders to layer 2 networks. It’s probably this can lead to some re-balancing of charges, however even a 10x improve in charges isn’t more likely to alter the essentially good worth proposition that comes with scaling with layer 2 networks.
Moreover, the latest announcement by Robinhood that they are going to be constructing their very own layer 2 community on Ethereum essentially validates the general layer 2 thesis inside Ethereum: layer 2 networks usually are not solely scaling possibility, in addition they allow quite a lot of enterprise fashions that may entice a variety of firms to affix the community.The layer 2 ecosystem is more likely to have a variety of individuals from the totally decentralized to the fully centralized.
And this brings us to the important thing query: does your organization want its personal layer 2 community? Likelihood is, you don’t. The true worth proposition of a blockchain ecosystem is the flexibility to work in cooperation with others with none one social gathering controlling the community. For those who’re a producing firm, for instance, you wish to work along with your suppliers and prospects on a stage enjoying discipline along with your rivals. Blockchains let everybody take part with out favoring anybody participant. In the long term, working collectively on a stage enjoying discipline is less expensive and preferable to attempting to combine into totally different programs managed by every one in all your key prospects or suppliers.
Whereas some layer 2 networks look very worthwhile proper now, that is solely true when you can generate good transaction quantity. Lots of the layer 2 networks working are doing little to no enterprise as they wrestle to distinguish themselves in a crowded market. In accordance with L2Beat, most of those networks have lower than $1mm in TVL bridged in from Ethereum and are averaging lower than one person operation per second.
So when does an organization want its personal layer 2 community? My speculation is that this works greatest for companies that may combination important transaction quantity into the community and whose prospects should not have the means or the person quantity to make their very own direct connection to Ethereum. Proper now, that largely means monetary companies companies which have hundreds or tens of millions of retail prospects, from Coinbase to Kraken to Robinhood. Extra companies will certainly comply with. Having a layer 2 community is likely to be seen, sooner or later, the way in which we checked out having a seat on the New York Inventory Trade. Brokerage companies would need them, however a automobile maker wouldn’t discover worth in it.
Three questions could be helpful in figuring out if a agency ought to launch its personal Ethereum layer 2 community: first, is the corporate in a position to combination a major quantity of its personal transactions or shoppers in comparison with different networks? Second, is transacting on-chain central to the corporate’s core enterprise mannequin (e.g., are you an middleman, particularly a monetary one which presently transacts on conventional monetary rails). Lastly, does your layer 2 strategy supply a differentiated worth proposition in comparison with the numerous different community choices on the market? For those who can say sure to all three choices, it is a doable path ahead.
For many different forms of companies, they might discover the optimum worth proposition to be connecting on to Ethereum, or one of many different open layer 2 networks. It is going to be more cost effective and extra non-public than going by means of an aggregator who will have the ability to mark up your transaction prices and see your transaction circulation and more cost effective than operating your individual community.
I believe, nonetheless, that earlier than we’re completed, fairly a couple of companies that haven’t any have to run their very own layer 2 will launch one anyway for a similar causes many companies launched non-public chains prior to now.
Regardless of how reliably they’ve failed, the attraction of personal blockchains was all the time onerous to counter. The attract of “controlling your future” and “taxing the ecosystem” was onerous to withstand. Public chains, with their openness, interoperability, and permissionless nature can look scary to enterprise customers who would favor extra management.
To the identical consumers who wished non-public chains, centralized layer 2 networks appear to be a midway home that will appear interesting. Not like non-public chains, I don’t assume they’re all doomed to fail, however I do suspect only some will succeed. Historical past retains repeating itself – largely as a result of we’re not excellent at listening to it. Right here we go once more.
Disclaimer: These are the non-public views of the writer and don’t signify the views of EY.
