Increasingly more firms are drawn to the concept of launching their very own Ethereum layer 2 community. Most of them shouldn’t trouble. There’s already a staggering variety of them — over 150. Fairly a couple of of those are centralized and linked to a single enterprise and a number of other firms similar to Robinhood have not too long ago introduced plans to launch their very own layer 2 networks.

The sights for launching an Ethereum layer 2 community are vital, particularly when in comparison with launching your personal layer 1 (basis layer) blockchain. Layer 1 networks should compete with networks like Ethereum and Solana in an already intensely aggressive and crowded market. Layer 2 networks that run on prime of Ethereum additionally face an intensely aggressive market however can concurrently draw upon the energy of the Ethereum ecosystem, because of deep integration into Ethereum itself.

With Ethereum having turned 10 in July, it stays the dominant good contract blockchain and it’s the largest single house for digital property, real-world property (RWA), stablecoins and decentralized finance functions. Ethereum’s share of the general decentralized finance ecosystem has been secure at about 50% for 3 years now. When layer 2 networks are included within the whole, it seems to be rising modestly.

The temptation to launch your personal Ethereum layer 2 community is straightforward to grasp — they seem like a helpful idea with nice economics. A layer 2 community on prime of Ethereum provides a little bit of “better of each worlds” performance: you’ll be able to management your personal ecosystem inside your layer 2 however retain integration with and entry to the general Ethereum ecosystem. Centralized layer 2 networks can set their very own worth constructions and have practically all the identical controls as a stand-alone non-public blockchain similar to deciding who has entry to the community and how much knowledge will probably be seen to others.

This comes with a price. Layer 2 networks should buy transaction processing area on the Ethereum mainnet to finalize their transactions (often called blob area) — however these prices are prone to be decrease than these related to beginning a community from scratch and competing head-on with Ethereum. In truth, in keeping with Token Terminal, the prices of creating a layer 2 are remarkably low. For Base, a layer 2 community run by Coinbase, throughout June of 2025, the community generated $4.9 million in payment income and spent simply $50,000 on layer 1 settlement charges.

Certainly, the layer 1 settlement charges on Ethereum are so low they’ve set off a fiery debate throughout the community ecosystem about whether or not they’re too low, and that layer 2 networks symbolize a switch of advantages from layer 1 stakeholders to layer 2 networks. It’s seemingly this can end in some re-balancing of charges, however even a 10x improve in charges isn’t prone to alter the essentially good worth proposition that comes with scaling with layer 2 networks.

Moreover, the latest announcement by Robinhood that they are going to be constructing their very own layer 2 community on Ethereum essentially validates the general layer 2 thesis inside Ethereum: layer 2 networks should not solely a superb scaling possibility, in addition they allow quite a lot of enterprise fashions that may entice a variety of firms to hitch the community.The layer 2 ecosystem is prone to have a variety of contributors from the absolutely decentralized to the fully centralized.

And this brings us to the important thing query: does your organization want its personal layer 2 community? Chances are high, you don’t. The true worth proposition of a blockchain ecosystem is the power to work in cooperation with others with none one occasion controlling the community. In case you’re a producing firm, for instance, you need to work along with your suppliers and prospects on a degree enjoying discipline along with your opponents. Blockchains let everybody take part with out favoring anybody participant. In the long term, working collectively on a degree enjoying discipline is less expensive and preferable to making an attempt to combine into completely different techniques managed by every one in all your key prospects or suppliers.

Whereas some layer 2 networks look very worthwhile proper now, that is solely true in the event you can generate good transaction quantity. Lots of the layer 2 networks working are doing little to no enterprise as they wrestle to distinguish themselves in a crowded market. In response to L2Beat, most of those networks have lower than $1mm in TVL bridged in from Ethereum and are averaging lower than one consumer operation per second.

So when does an organization want its personal layer 2 community? My speculation is that this works finest for companies that may mixture vital transaction quantity into the community and whose prospects shouldn’t have the means or the person quantity to make their very own direct connection to Ethereum. Proper now, that largely means monetary providers companies which have hundreds or hundreds of thousands of retail prospects, from Coinbase to Kraken to Robinhood. Extra companies will certainly observe. Having a layer 2 community could be seen, sooner or later, the way in which we checked out having a seat on the New York Inventory Alternate. Brokerage companies would need them, however a automobile maker wouldn’t discover worth in it.

Three questions could be helpful in figuring out if a agency ought to launch its personal Ethereum layer 2 community: first, is the corporate in a position to mixture a major quantity of its personal transactions or purchasers in comparison with different networks? Second, is transacting on-chain central to the corporate’s core enterprise mannequin (e.g., are you an middleman, particularly a monetary one which presently transacts on conventional monetary rails). Lastly, does your layer 2 method supply a differentiated worth proposition in comparison with the various different community choices on the market? In case you can say sure to all three choices, this can be a potential path ahead.

For many different varieties of companies, they might discover the optimum worth proposition to be connecting on to Ethereum, or one of many different open layer 2 networks. Will probably be less expensive and extra non-public than going by means of an aggregator who will be capable to mark up your transaction prices and see your transaction circulate and less expensive than operating your personal community.

I believe, nevertheless, that earlier than we’re finished, fairly a couple of companies that don’t have any must run their very own layer 2 will launch one anyway for a similar causes many companies launched non-public chains prior to now.

Regardless of how reliably they’ve failed, the attraction of personal blockchains was at all times onerous to counter. The attract of “controlling your future” and “taxing the ecosystem” was onerous to withstand. Public chains, with their openness, interoperability, and permissionless nature can look scary to enterprise customers who would like extra management.

To the identical consumers who wished non-public chains, centralized layer 2 networks seem like a midway home that will appear interesting. In contrast to non-public chains, I don’t assume they’re all doomed to fail, however I do suspect just a few will succeed. Historical past retains repeating itself – principally as a result of we’re not excellent at listening to it. Right here we go once more.

Disclaimer: These are the non-public views of the creator and don’t symbolize the views of EY.