More and more companies are attracted by the idea of launching their own Ethereum Layer 2 network. Most of them shouldn’t bother. There is already a staggering number of them – over 150. A lot of these are centralized and linked to a single company, and several companies like Robinhood have recently announced plans to launch their own layers 2 networks.
The attractions for launching an Ethereum Layer 2 network are significant, especially compared to the launch of your own layer 1 (Foundation Layer) Blockchain. LAG 1 networks must compete with networks such as Ethereum and Solana on an already intensely competitive and crowded market. LAG 2 networks running on top of Ethereum also face an intensely competitive marketplace, but can at the same time draw on the strength of the Ethereum ecosystem thanks to deep integration in Ethereum itself.
As Ethereum is 10 in July, it remains the dominant smart contract blockchain and it is the largest single home for digital assets, assets in the real world (RWA)Stablecoins and decentralized financing applications. Ethereum’s share of the total decentralized financing ecosystem has been stable by approx. 50% in three years now. When LAG 2 networks are included in the total amount, it seems to rise modestly.
The temptation to launch your own Ethereum Layer 2 network is easy to understand – they look like a useful concept with great economy. A layer 2 network on top of Ethereum offers a bit of “best of both worlds” functionality: You can control your own ecosystem within your layer 2, but maintain integration with and access to the overall Ethereum ecosystem. Centralized LAG 2 networks can set their own pricing structures and have almost all the same controls as an independent private blockchain, such as deciding who has access to the network and what kind of data will be visible to others.
This comes with a cost. Layer 2 networks must buy transaction treatment room at Ethereum Mainnet to exit their transactions (Known as a brick place) -But these costs are probably lower than those associated with starting a network from scratch and competing head-on with Ethereum. According to tokenter minals, the cost of developing a layer 2 is actually remarkably low. For base, a layer 2 network operated by Coinbase, in June 2025, the network generated $ 4.9 million in fee revenue and spent only $ 50,000 on layer 1 settlement fees.
In fact, LAG 1 settlement fees at Ethereum are so low that they have offset a fiery debate within the network ecosystem about whether they are too low and the LAG 2 network represents a transfer of benefits from LAG 1 stakeholders to LAG 2 networks. It is likely that this will result in some repayment of fees, but even a 10x increase in fees will probably not change the basic good value proposition that comes with scaling with LAG 2 networks.
Furthermore, the recent announcement of Robinhood validates that they will build their own layer 2 networks in Ethereum, basically the total layer 2 thesis within Ethereum: LAG 2 network is not only a good scaling option, they also make a number of business models that will entice a large number of companies to join the network. The layer 2 -ecosystem is likely to have a number of participants from the fully decentalized to the completely of the very central.
And this brings us to the central question: Does your business need its own Layer 2 network? Chances are you don’t. The real value proposition for a blockchain ecosystem is the ability to work in collaboration with others without any party that controls the network. For example, if you are a manufacturing company, you will work with your suppliers and customers on equal terms with your competitors. Blockchains let everyone participate without favoring any participant. In the long term, it is much cheaper and is preferred to work together on equal terms and prefer to try to integrate into different systems that are controlled by each of your key customers or suppliers.
While some layers 2 networks look very profitable right now, this is only true if you can generate good transaction volume. Many of the Layer 2 networks that drift do little to no business as they struggle to differentiate themselves in a crowded market. According to L2Beat, most of these networks have less than $ 1 mm in Tvl, which is bridged from Ethereum and is on average less than a user operation per day. Second.
So when does a company need its own layer 2 network? My hypothesis is that this works best for companies that can collect significant transaction volume in the network and if customers do not have the funds or the individual volume to create their own direct connection to Ethereum. Right now, it means largely financial service companies that have thousands or millions of retail customers, from Coinbase to Kraken to Robinhood. More companies will definitely follow. Having a layer 2 network can in the future be seen how we looked at having a seat on the New York Stock Exchange. Broker companies wanted them, but a car manufacturer would not find value in it.
Three questions would be useful for determining whether a company should launch its own Ethereum Layer 2 network: First, the company is able to gather a significant volume of its own transactions or clients compared to other networks? Secondly, shopping on the chain is centrally in the company’s core business model (eg,. Finally, your Layer 2 approach offers a differentiated value proposition compared to the many other networking options out there? If you can say yes to all three options, this is a possible path forward.
For most other types of companies, they can find the optimal value proposition to be connected directly to Ethereum, or one of the other open layers 2 networks. It will be cheaper and more private than undergoing an aggregator that will be able to mark your transaction costs and see your transaction current and cheaper than running your own network.
However, I suppose that before we are done, quite a few companies that do not need to run their own layer 2 will still launch one of the same reasons that many companies launched private chains in the past.
No matter how reliable they failed, the attraction of private blockchains was always difficult to address. The connection of “control of your fate” and “taxation of the ecosystem” was difficult to resist. Public chains with their openness, interoperability and permissionless nature may look frightening to business users who prefer more control.
To the same buyers who wanted private chains, centralized layers are similar to a half -way house that may seem appealing. Unlike private chains, I don’t think they are all doomed to fail, but I suspect that only a few will succeed. The story repeats itself – mostly because we are not very good at paying attention to it. Here we go again.
Disclaimer: This is the author’s personal views and does not represent the views of EY.
