CoinDesk: Layer 2s face survival challenge without differentiation

The general-purpose Ethereum Layer 2 (L2) market is entering a consolidation phase, highlighted by the recent shutdown of Zero Network, CoinDesk reported. Ben Fisch, co-founder of Espresso Systems, said the problem is not L2s themselves but the overabundance of general-purpose chains, arguing there is no reason for numerous networks to exist with identical functions. According to data from DefiLlama, over 80% of the total value locked in Ethereum L2s is concentrated in Base and Arbitrum. In contrast, many other L2s, including Linea, World Chain, Starknet, and Mantle, have seen their bridged deposits decrease in recent months. The industry consensus is that only L2s specializing in specific services like payments, stablecoins, or real-world assets (RWA) are likely to survive. CoinDesk cited Coinbase's Base as a prime example, analyzing that projects with an existing user base and clear use cases will have a competitive advantage.