Ethereum’s Layer 1 (L1) is re-establishing its position as the preferred base for high-value decentralized finance (DeFi) projects, boasting a Total Value Locked (TVL) significantly greater than its closest competitors. Meanwhile, a notable trend is emerging: several blockchain projects, previously operating as independent Layer 1s, are now transitioning to become Layer 2 (L2) solutions within the Ethereum ecosystem.
This dynamic shift highlights a twofold recognition. On one hand, the stability and established security of Ethereum’s mainnet continue to attract significant capital. On the other, the L2 model offers substantial benefits, including potential cost reductions and access to Ethereum’s vast network effects.
Major Projects Embrace Ethereum’s L2 Model
Several prominent platforms are making the move to an L2 framework, signaling a broader industry trend toward consolidation within the Ethereum ecosystem.
Celo’s Strategic Shift to L2
In a significant move in March, the mobile-first payments network Celo opted to discontinue its independent validator network and rebrand as an Ethereum L2. This strategic decision is projected to yield substantial operational cost savings, estimated at approximately $7 million annually, showcasing the financial advantages of leveraging Ethereum’s infrastructure.
Ronin’s Return to Ethereum
Blockchain gaming platform Ronin, known for its popular game Axie Infinity, recently announced its plans to integrate with Ethereum as an L2 by early 2026. This move marks a return to the Ethereum ecosystem after original network congestion issues prompted its initial departure five years prior. Jeffrey “Jiho” Zirlin, co-founder of Sky Mavis, the creator of Ronin and Axie Infinity, noted that Ethereum has largely delivered on its scaling roadmap, making this return feasible.
High-Value DeFi Projects Maintain Ethereum L1 Presence
Conversely, some high-value DeFi protocols are solidifying their commitment to Ethereum’s L1. Projects like Synthetix continue to operate directly on the mainnet, underscoring its enduring appeal for applications requiring maximum security and direct access to Ethereum’s decentralized infrastructure. This parallel trend underscores Ethereum’s multifaceted role in the blockchain space, serving both as a robust foundation for L1 dApps and a scalable hub for L2 solutions.
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