Layer 2 Market Consolidates as Users Gravitate Toward Base, Arbitrum, and Optimism

• Smaller Layer 2 networks saw a 98% revenue drop from March to May 2025.
• Users and developers are shifting to dominant L2s with stronger fundamentals.
• Base, Arbitrum, and Optimism tokens show mixed but stable short-term price trends.

The Ethereum Layer 2 (L2) ecosystem is experiencing a severe revenue crunch and market consolidation, according to a new report. Collective revenue for L2 networks outside of the top three, Base, Arbitrum, and Optimism, collapsed by 98% between March and May, falling from a peak of $53.8 million to under $1 million.

This dramatic decline in income for smaller L2s signals a significant shift in user activity and developer trust toward the more established networks. With the broader Ethereum scaling ecosystem evolving rapidly, capital and users appear to be gravitating toward networks with stronger fundamentals and brand recognition.

Market Share Consolidates Around Top Three L2s

The collapse in revenue signals a shift in both user activity and developer trust. While Arb…

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