The total value locked in the layer-2 ecosystem has surged past $51 billion, is Ethereum at risk of being “swallowed”?

The explosion of total value locked (TVL) in the layer-2 ecosystem, surpassing the $51 billion threshold, is raising concerns about its potential negative impact on Ethereum. This growth, mainly coming from two major networks, Arbitrum One and Base, shows the growing interest in layer-2 scaling solutions. Arbitrum currently accounts for 35% of the total layer-2 system’s TVL, while Base has also seen significant growth, showing their potential to attract users and asset value.

Although layer-2 networks offer benefits in terms of scalability and reduced transaction fees, concerns that they could “drain” Ethereum’s value are growing. More transactions and assets could move to layer-2 instead of remaining on the mainnet, thereby reducing Ethereum’s revenue and growth. However, Ethereum's Dencun upgrade also contributes to supporting transaction cost stability and scalability for layer-2 solutions, balancing the appeal of these platforms with the mainnet.