ETH Layer 2 Value Drain

"Layer 2 networks recorded a sharper usage decline than Ethereum mainnet. Total L2 user operations fell about 77% between January and June, compared with 9% on Ethereum."

"Activity moved to layer-2 networks that pay almost nothing to the base layer, the burn collapsed, and ETH quietly went inflationary again. The mechanism that made ultrasound money true, EIP-1559 burning at scale, had not been removed. It had been bypassed."

"Ethereum is only getting 0.15% of the revenue that Robinhood Chain is generating. 'If your thesis is ETH is a revenue-generating asset, this is the ultra-bear case,' the analyst said."

"The topic has been highly relevant lately due to Layer 2 expansion on Ethereum... it brings up concerns whether the activity conducted on Layer 2 brings direct value for ETH holders."

""I think only a few L2s with clear financial demand will be able to sustain themselves over time," said Alice Hou, a former research analyst at Messari, to CoinDesk."

"Until a credible value-capture mechanism is introduced at the protocol level, this remains a genuine drag on price."

"However, critics argue that the same model can reduce direct fee demand for Ethereum’s base layer. When activity moves to separate rollups, value can become spread across many networks instead of staying concentrated on mainnet."

"Ethereum trades near $2,100 after declining 3% over the past two weeks, underperforming a global market that stayed flat during the same period."

"Critics contend that while the growth of Layer-2 networks like Arbitrum, Base, and Optimism aided in the ecosystem's scaling, they may also lessen direct value capture for ETH."

""Ethereum's L2 roadmap is a catastrophic failure," Max Resnick, Lead Economist at Anza, said in a widely circulated critique."