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

Ethereum’s Shifting Landscape: L1 Revival and L2 Integration

Ethereum’s ecosystem is undergoing a significant transformation. High-value Decentralized Finance (DeFi) projects are reinforcing its Layer 1 (L1) prominence, while several Layer 1 blockchains are migrating to become Layer 2 (L2) solutions within the Ethereum network. This dual movement highlights the evolving strategies for scalability and cost efficiency in the blockchain space.

The Resurgence of Ethereum L1 for DeFi

Ethereum’s mainnet is reconfirming its position as a primary hub for substantial DeFi applications. Projects like Synthetix and Aave continue to leverage the robust security and extensive network effects of Ethereum’s base layer. The platform boasts a Total Value Locked (TVL) significantly higher than its competitors, underscoring its continued appeal for high-value transactions and protocols.

Alt-L1s Embrace the L2 Model

Meanwhile, several independent Layer 1 blockchains are opting to integrate with Ethereum as Layer 2 solutions. This strategic shift offers considerable advantages, including substantial cost reductions and access to Ethereum’s vast user base and developer community.

In March, the mobile payments platform Celo transitioned away from its independent validator network to become an Ethereum L2. This move is projected to result in annual operational savings nearing $7 million, demonstrating a clear economic incentive for such migrations.

Blockchain gaming platform Ronin also announced its intention to rejoin the Ethereum ecosystem as an L2 by early 2026. This decision marks a return after network congestion issues earlier led its popular game, Axie Infinity, to operate off the mainnet. Jeffrey “Jiho” Zirlin, co-founder of Sky Mavis (the creator of Axie Infinity and Ronin), indicated that Ethereum has largely delivered on its scaling objectives, making this reintegration feasible.

These migrations illustrate a broader trend where the benefits of joining Ethereum’s L2 ecosystem, including cost savings and enhanced network effects, are becoming increasingly attractive for projects previously operating as standalone Layer 1s.