The emergence of Ethereum layer 2 networks has piqued the interest of numerous corporations eager to establish their own platforms. However, the growing number of existing layer 2 networks—over 150—suggests that many organizations may not need to pursue this route. A significant number of these existing networks are centralized and linked to specific enterprises, with major players like Robinhood recently announcing their plans to launch proprietary layer 2 solutions.
The appeal of launching a layer 2 network is substantial, particularly when juxtaposed with the complexities of establishing a layer 1 blockchain. Competing in the saturated landscape of layer 1 networks like Ethereum and Solana poses a formidable challenge. Conversely, layer 2 networks benefit from the robust Ethereum ecosystem, leveraging its infrastructure for added efficiency and integration.
Ethereum, which celebrated its tenth anniversary in July, continues to dominate the smart contract landscape, accounting for a significant portion of digital and real-world assets, stablecoins, and decentralized finance (DeFi) applications. Its hold on the DeFi ecosystem remains stable at around 50%, and this share appears to be gradually increasing as layer 2 networks gain traction.
The attractiveness of layer 2 networks stems from their dual functionality: they allow organizations to control their ecosystem while remaining connected to the broader Ethereum infrastructure. Centralized layer 2 networks have the flexibility to establish pricing structures and manage access, akin to private blockchains. However, there are associated costs; layer 2 networks must acquire transaction processing space on the Ethereum mainnet—referred to as blob space. Still, these expenses are expected to be lower than those incurred in launching a new network from the ground up. For instance, Coinbase’s Base layer 2 network reported generating $4.9 million in fee revenue in June 2025, while incurring only $50,000 in layer 1 fees.
Debate rages within the Ethereum community over the low cost of layer 1 settlement fees, raising concerns that these may benefit layer 2 networks at the expense of layer 1 stakeholders. While a potential fee re-balancing is anticipated, even a significant increase is unlikely to undermine the economic advantages offered by scaling through layer 2 solutions.
Robinhood’s recent announcement reinforces the validity of the layer 2 thesis in Ethereum. It not only signifies that layer 2 networks are viable scaling solutions but also highlights their potential to support various business models, attracting a diverse range of companies.
However, the pressing question remains: does your organization genuinely require its own layer 2 network? In most cases, it may not. The fundamental value of blockchain ecosystems lies in their collaborative nature, enabling various participants to interact without preference for any single entity. For example, a manufacturing firm may benefit from cooperation with suppliers and customers in a shared environment rather than navigating disparate systems controlled by individual stakeholders.
While some layer 2 networks may appear lucrative, profitability largely hinges on achieving substantial transaction volume. Many existing networks struggle to stand out in an increasingly competitive landscape. Data from L2Beat indicates that numerous networks have minimal total value locked (TVL) and minimal user activity.
So, when might a company actually need a dedicated layer 2 network? It is likely to be beneficial for organizations with the ability to aggregate significant transaction volumes and cater to customers lacking the capacity for direct Ethereum connections. This presently applies mainly to financial services firms, such as Coinbase and Kraken, with extensive retail customer bases. The establishment of a layer 2 network may soon be seen as a necessity for brokerage firms, akin to securing a position on the New York Stock Exchange, while other sectors may find it superfluous.
To assess the necessity of a layer 2 network, companies can consider three essential questions: can they aggregate significant transaction volumes? Is on-chain transacting central to their business model? And does their network offer a distinct value proposition compared to existing options? Affirmative answers to all three may indicate a viable path forward.
For many firms, however, the best strategy may involve direct engagement with Ethereum or utilizing established layer 2 networks. This approach can be more cost-effective and private, avoiding additional expenses and oversight associated with aggregators.
Despite the inclination of some firms to develop layer 2 networks for the allure of control and potential financial advantages, history suggests that caution is warranted. The appeal of managing one’s own environment is compelling, and while centralized layer 2 solutions may be more viable than private blockchains, it is anticipated that only a select few will endure the test of time. As the landscape evolves, lessons from the past may not be easily heeded, reiterating the need for careful consideration in the drive toward layer 2 network implementation.
