An increasing number of firms are interested in the thought 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 number of of those are centralized and linked to a single enterprise and several other firms corresponding to Robinhood have 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 personal 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 power 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 residence for digital belongings, real-world belongings (RWA), stablecoins and decentralized finance purposes. Ethereum’s share of the general decentralized finance ecosystem has been steady 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 personal Ethereum layer 2 community is straightforward to know — they appear like 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 personal 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 worth constructions and have almost all the identical controls as a stand-alone non-public blockchain corresponding to deciding who has entry to the community and how much information shall be seen to others.
This comes with a value. Layer 2 networks should buy transaction processing house on the Ethereum mainnet to finalize their transactions (generally known as blob house) — however these prices are prone to be decrease than these related to beginning a community from scratch and competing head-on with Ethereum. In truth, in line with 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 throughout the community ecosystem about whether or not they’re too low, and that layer 2 networks characterize a switch of advantages from layer 1 stakeholders to layer 2 networks. It’s doubtless this may lead to some re-balancing of charges, however even a 10x enhance in charges shouldn’t be prone to alter the basically good worth proposition that comes with scaling with layer 2 networks.
Moreover, the current announcement by Robinhood that they are going to be constructing their very own layer 2 community on Ethereum basically validates the general layer 2 thesis inside Ethereum: layer 2 networks will not be solely a superb scaling possibility, in addition they allow a wide range of enterprise fashions that may entice a variety of firms to affix the community.The layer 2 ecosystem is prone to have a spread of members from the absolutely decentralized to the utterly 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 power to work in cooperation with others with none one get together controlling the community. In the event you’re a producing firm, for instance, you need to work together with your suppliers and prospects on a degree taking part in subject together with your rivals. Blockchains let everybody take part with out favoring anyone participant. In the long term, working collectively on a degree taking part in subject is less expensive and preferable to attempting to combine into totally different methods managed by every one among your key prospects or suppliers.
Whereas some layer 2 networks look very worthwhile proper now, that is solely true in the event you can generate good transaction quantity. Most of the layer 2 networks working are doing little to no enterprise as they wrestle to distinguish themselves in a crowded market. In keeping 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 mixture 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 1000’s or hundreds of thousands of retail prospects, from Coinbase to Kraken to Robinhood. Extra companies will certainly comply with. Having a layer 2 community is perhaps seen, sooner or later, the way in which we checked out having a seat on the New York Inventory Change. Brokerage companies would need them, however a automotive maker wouldn’t discover worth in it.
Three questions can be helpful in figuring out if a agency ought to launch its personal Ethereum layer 2 community: first, is the corporate capable of mixture a big 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 method supply a differentiated worth proposition in comparison with the various different community choices on the market? In the event you can say sure to all three choices, it is a doable path ahead.
For many different kinds of companies, they might discover the optimum worth proposition to be connecting on to Ethereum, or one of many different open layer 2 networks. Will probably be more cost effective and extra non-public than going by way of an aggregator who will have the ability to mark up your transaction prices and see your transaction movement and more cost effective than working your personal community.
I believe, nonetheless, that earlier than we’re executed, fairly a number 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 previously.
Regardless of how reliably they’ve failed, the attraction of personal blockchains was all the time laborious to counter. The attract of “controlling your future” and “taxing the ecosystem” was laborious 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 patrons who needed non-public chains, centralized layer 2 networks appear like 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 being attentive to it. Right here we go once more.
Disclaimer: These are the non-public views of the creator and don’t characterize the views of EY.
