Why Your Company’s Own Ethereum Layer 2 Network Is Probably a Gigantic Waste of Time

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Opinion

Every day, more companies get starry-eyed about launching their very own Ethereum layer 2 network. Spoiler alert: most of them really shouldn’t bother. The market is already bursting at the seams with over 150 of these things, many as centralized as your neighborhood Starbucks and sponsored by single enterprises. Even Robinhood has decided to jump on the bandwagon, as if one layer 2 isn’t enough.

The allure of your own Ethereum layer 2 is pretty tempting, especially when compared to launching a brand new layer 1 blockchain. Those layer 1 networks have to duke it out with Ethereum, Solana, and a host of others in a gladiatorial arena that’s about as welcoming as a porcupine convention. Layer 2s, by contrast, get to freeload on Ethereum’s massive ecosystem while pretending they’re reinventing the wheel. It’s the blockchain equivalent of having a penthouse on top of someone else’s house.

Ethereum just turned 10 (yes, it’s now officially an adult in blockchain years), and remains the reigning champ for smart contracts, digital assets, real-world assets (fancy phrase: RWAs), stablecoins, and decentralized finance applications. Ethereum’s slice of the DeFi pie has been a solid 50% for the last three years-and that’s without counting layer 2s. With them in the mix, the share looks like it’s creeping up, but more on that later.

Launching your own layer 2 network is appealing because it offers a bit of “best of both worlds” magic: you get to play god in your own ecosystem while sipping from the Ethereum fountain. Centralized layers 2 can set their own prices and decide who’s in or out. It’s like running an exclusive club-but with more cryptography and fewer cocktail waiters.

Of course, there’s a catch. You gotta pay Ethereum for “blob space” (yes, blob space is a thing) to finalize your transactions. But the good news is, this is way cheaper than starting a network from scratch and then immediately getting mobbed by Ethereum veterans. Take Coinbase’s Base network: in June 2025, they raked in $4.9 million in fees but only shelled out $50,000 for these Ethereum “blob space” fees. Not too shabby.

The fees for layer 1 (Ethereum itself) are so low they’ve kicked off a fiery debate among blockchain nerds about whether they’re too low-and if layer 2 networks are basically freeloading at layer 1’s expense. Expect some rebalancing soon, although even a 10x fee hike probably won’t ruin the party for layer 2 fans.

Robinhood’s recent proclamation that it’s building its own layer 2 network basically confirms what insiders have suspected all along: layer 2s are not just some passing fad, but a legit way to scale Ethereum-and maybe even make some money. The ecosystem is a mixed bag, ranging from fully decentralized hippie collectives to centralized, suits-in-blazers enterprises. Whatever your flavor, there’s a layer 2 for you.

So, the million-dollar question: does your company need its own layer 2 network? The odds are pretty good that the answer is no. The real beauty of blockchains is their ability to level the playing field without one party hogging the controls. If you’re in manufacturing, for example, you want a system where suppliers, customers, and even competitors can all play nice without special treatment. Trust me, it’s way easier (and cheaper) to share one blockchain playground than to build your own and then spend the next decade begging others to come play.

Sure, some layer 2 networks seem profitable right now, but that only holds if they have actual users-which many don’t. According to L2Beat, most are limping along with less than $1 million bridged value and less than one user operation per second. Basically ghost towns in cyber land.

So when should a company bother? If you’ve got a massive volume of transactions (think millions of customers) and those customers can’t easily connect to Ethereum themselves, maybe it makes sense. Right now, that’s mostly financial services firms like Coinbase, Kraken, and Robinhood. Having your own layer 2 might soon be as essential as having a seat on the New York Stock Exchange-lots of portfolio managers want in, but good luck convincing a car manufacturer.

Ask yourself three questions before diving in:
1. Can your company aggregate a big enough transaction volume compared to other players?
2. Is on-chain activity core to your business (especially if you’re a financial middleman)?
3. Do you offer something truly different from the swarm of existing networks?
If you answered “yes” to all three, congratulations, you might have a shot at not being blockchain roadkill.

For everyone else, just plug into Ethereum or one of the open layer 2s. It’ll be cheaper, more private, and won’t require hiring an army of blockchain cowboys to stare at computer screens all night.

Yet, history teaches us that many companies will launch pointless layer 2s anyway, just like the private blockchain craze of yesteryear. No matter the spectacular failures, the siren song of “controlling your destiny” and “taxing the ecosystem” is just too seductive-and honestly, who doesn’t want to play God for a while? 🙃

To those enchanted by private blockchains, centralized layer 2s look like a cozy halfway house. Not quite perfect, but definitely more manageable than sharing everything openly. I doubt all of these attempts will make it, but hey-history repeats itself because we’re delightfully bad at learning. Strap in; here we go again.

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2025-09-13 21:31