Ethereum's Layer 2 networks face an unprecedented identity crisis

Ethereum Layer 2 Ecosystem Faces Turmoil Amid Sharp Decline in Active Users

According to data from NS3.AI, these scalability solutions have seen their user base plummet from 58.4 million to approximately 30 million, a significant setback that questions the attractiveness of these networks within the community. Meanwhile, Ethereum Layer 1 is experiencing an opposite trend, with the number of active addresses doubling, raising critical questions about the future of Layer 2.

User Exodus: When Layer 2 Loses Its Appeal

The decline in user activity on Layer 2 networks occurs in a context where these solutions had promised a scalability revolution. The halving of active users reveals a deep ambivalence in the market toward these protocols. This disaffection could be attributed to several factors: fees still perceived as too high compared to initial expectations, slower-than-expected adoption, or a redirection of liquidity toward other Layer 1 solutions or directly to Ethereum mainnet.

Layer 1 Regains Ground Amid Layer 2 Decline

The contrast is striking: while Layer 2 networks struggle to retain users, Ethereum Layer 1 shows clear growth with a doubling of its active addresses. This reversal of trends suggests a reassessment of priorities within the ecosystem, where users seem to regain confidence in the base layer, especially thanks to moderation of transaction fees and prospects for improving gas limits planned for this year.

Beyond Scalability: Vitalik Buterin Charts a New Roadmap

In this bleak context, Vitalik Buterin, co-founder of Ethereum, proposes a strategic reorientation of Layer 2 networks. He believes these solutions can no longer be limited to scalability alone. They must rediscover their value proposition by exploring other dimensions: advanced privacy, specialized applications tailored to specific use cases, or the integration of innovative features that Layer 1 cannot offer. Although this perspective is insightful, it arrives amid growing market skepticism.

Layer 2 Tokens Under Pressure: A Reflection of Uncertainty

The downward trend also affects digital assets associated with major Layer 2 protocols. Scalability tokens are experiencing notable declines, amplifying investor community doubts. This depreciation illustrates how the loss of users immediately impacts capital markets, creating a negative cycle where falling prices discourage developers and potential users.

2026: The Critical Year for Layer 2 Redemption?

Despite current challenges, several catalysts could revitalize Layer 2 solutions this year. Planned improvements to Ethereum’s gas limits, which are expected to extend until 2026, could reduce the cost advantage of Layer 2 solutions. For these networks, it becomes imperative to capitalize on concrete use cases and offer a differentiated alternative. Layer 2 must prove that it is not interchangeable with Layer 1 but provides unique and essential solutions for certain market segments.