Marc Boiron, CEO of Polygon Labs, believes that the intense rivalry between Ethereum Layer-2 networks is the “biggest problem” facing the second-largest digital asset by market capitalization.
In an April 7 post on social media platform He explained:
“Ethereum’s biggest problem is constantly cannibalizing itself through all the L2s competing for developers, users, and liquidity instead of competing outside the Ethereum ecosystem. Microeconomics 101 would tell you this is a bad strategy. I don’t have the answer, but it needs to be addressed.”
Several members of the crypto community share Boiron’s perspective, arguing that Layer 2 networks should target those outside the Ethereum ecosystem. Karthik Senthil, the venture partner at crypto hedge fund Lattice, said:
“L2s will only be successful if they meaningfully grow the pie and attract 99% of the things (including web2) that are outside of Ethereum today. If we fight over the same people who are already here, no one wins anything.”
Notably, Boiron reposted a social media post urging the layer 2 networks to play the long game and “defend each other when they win.” The message reads:
“As fragmentation and chain abstraction will soon be resolved, L2s need to reshape their views on the value of moving apps from one L2 to another. Soon, a successful application to x-L2 will yield a percentage increase in value to y-L2. Stealing applications is a cannibalization of that value.”
Meanwhile, some community members argued that competition between layer 2s could ultimately improve Ethereum’s ecosystem.
Popularity of tier-2s
Layer-2s are blockchain networks designed to improve the scalability of Ethereum. In recent years, they have gained significant popularity and adoption within the crypto ecosystem.
Data from L2Beat shows that the networks cumulatively process 123 transactions per second, surpassing Ethereum’s main chain by a factor of 10.7. For context, Coinbase’s high-flying Base network and Arbitrum, the largest layer2 blockchain, recorded higher transactions per second than the Ethereum mainnet in the past day.
Additionally, the number of active wallets using the networks surpassed five million early this month. At the same time, the total value of assets locked on these platforms has exceeded $42 billion, and there are indications that this trend could continue.