Author Tanay Ved via Coin Metrics

*A data-driven look at how Ethereum’s Layer-2 growth is reshaping network economics and ETH’s value accrual.
*Ethereum’s shift toward a Layer-2-centric scaling model has expanded its ecosystem but reduced mainnet transaction demand, altering its economic dynamics. The Dencun upgrade introduced blobspace, significantly lowering L2 settlement costs and enabling highly profitable rollups like Base, which sparked debate over whether L2s benefit or extract value from Ethereum. As ETH’s returns increasingly hinge on network fundamentals—such as fees and token burn—its recent underperformance signals market unease over weakening value accrual. Upcoming upgrades like Pectra aim to double blob capacity, boost both L1 and L2 demand, and reestablish Ethereum’s long-term value proposition across its modular infrastructure.

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