Ethereum 2.0 Economics: The Layer-2 Impact

For a long time, Ethereum felt like a business that had become too successful for its own good. Every new app, NFT mint, or DeFi trade pushed gas fees higher, making everyday use expensive and unpredictable. Layer-2 networks emerged as Ethereum’s way out of this problem, not by replacing the base layer, but by letting it focus on what it does best: security and settlement. This shift became real with the Dencun upgrade and EIP-4844, which introduced blob transactions and cut rollup data costs by as much as 90–98%. Overnight, Ethereum stopped being the place where everything had to happen and became the place where everything ultimately settles.

Layer-2 adoption has coincided with shifts in Ethereum’s market valuation, some analysts estimate that the rise of L2 solutions like Base has exerted downward pressure on ETH’s market cap by as much as $50 billion, as fees and activity migrate off the base layer. Many of the biggest dApps and companies are now building on Ethereum Layer-2s, including DeFi giants like Uniswap, Aave, and GMX running on Arbitrum, as well as major ecosystems and enterprise adoption through Coinbase’s Base, Optimism’s Superchain, and Polygon’s zkEVM scaling platforms. (coinrank.io)

That transition, however, came with a visible trade-off. Ethereum used to earn enormous fees directly from users, with EIP-1559 burning ETH and reinforcing the idea of a deflationary asset. As activity moved to Layer-2s like Arbitrum, Optimism, and Base, those fees collapsed. In fact, Ethereum deliberately gave up over $100 million in fee revenue in 2025 alone, prioritizing long-term scalability over short-term income. To some observers, this looked like Ethereum weakening its own economics. In reality, it was choosing to grow the pie rather than fight over slices.

The payoff becomes clearer when one zooms out. Cheap Layer-2 transactions unlocked new users, new applications, and entire categories, from on-chain games to micro-transactions that simply were not viable on mainnet. As usage exploded, Ethereum’s role quietly shifted from “expensive computer” to global settlement backbone. A broader breakdown of this migration shows how L2 adoption is expanding Ethereum’s economic reach rather than shrinking it, as explored in this long-term impact analysis. Instead of charging everyone directly, Ethereum now earns its keep by securing everything.

Still, the new model is not without tension. Some Layer-2s generate substantial profits while paying relatively little back to Ethereum, raising concerns that too much value is being captured at the edges. A recent report highlighted how networks like Base earn meaningful revenue while contributing minimally in blob fees, sparking debate about whether Ethereum’s base layer is being underpaid for the security it provides. These questions are shaping Ethereum’s roadmap, pushing discussions around enshrined rollups, shared sequencing, and fairer value flow back to Layer-1.

In the long run, Layer-2s do not make Ethereum smaller, they make it more honest about what it is. Ethereum is no longer trying to do everything itself. It is becoming the neutral, global layer of trust beneath a growing stack of execution environments. ETH remains the asset that secures the system, pays for settlement, and anchors value across rollups. The economics may look quieter on the surface, but underneath, Ethereum is positioning itself to scale with the world rather than compete with it.