Back to Ethereum: How Synthetix, Ronin and Celo saw the lig

Ethereum’s Evolving Landscape: A Resurgence of Layer 1 and Strategic Layer 2 Migrations

Ethereum’s core blockchain, often referred to as Layer 1 (L1), is experiencing a notable resurgence. High-value decentralized finance (DeFi) projects, including Synthetix and Aave, continue to build and thrive directly on this foundational layer.

Simultaneously, a significant trend of projects migrating to Ethereum’s Layer 2 (L2) ecosystem is underway. This strategic shift is driven by the potential for substantial cost savings and enhanced network effects.

Alt-L1s Embrace Layer 2 for Efficiency

Several prominent blockchain projects, initially operating as independent Layer 1 networks, are transitioning to become Layer 2 solutions on Ethereum. This move allows them to leverage Ethereum’s robust security and developer community while benefiting from the scalability and reduced transaction fees L2s provide.

• Celo’s Cost-Saving Transition: In a significant move earlier this year, the mobile-first blockchain Celo transitioned from its independent validator network to become an Ethereum L2. This strategic decision has reportedly resulted in annual operational cost savings of nearly $7 million.
• Ronin’s Planned Return: Blockchain gaming platform Ronin, known for its game Axie Infinity, recently announced its intention to integrate with Ethereum as an L2 by early 2026. This move marks a return to the Ethereum ecosystem, five years after network congestion prompted its initial departure. Sky Mavis co-founder Jeffrey “Jiho” Zirlin has noted Ethereum’s progress in delivering on its scaling roadmap.

Ethereum’s Enduring Strength in DeFi

Ethereum’s Layer 1 continues to solidify its position as a central hub for high-value DeFi applications. The network boasts a total value locked (TVL) significantly higher than its closest competitors, underscoring its dominance in the decentralized finance space.

The L2 model offers compelling advantages, including substantial cost reductions and access to Ethereum’s expansive network effects. This combination makes it an attractive destination for projects seeking to optimize their operations and expand their reach within the broader blockchain ecosystem.