Ethereum (ETH) news: Not all layer 2s are dying, but many no longer have a reason to exist
Zero Network’s shutdown highlights a broader shakeout in Ethereum’s layer-2 market. Despite cheaper rollup launches after Ethereum’s Dencun upgrade, many general-purpose L2s are struggling to attract lasting users, liquidity, and developer activity. Activity is concentrated in a few winners, especially Base and Arbitrum, which hold most L2 DeFi TVL, while smaller chains have seen declining bridge deposits. The main argument is that the market is not overcrowded with all L2s, but with too many generic ones. Industry voices say the future belongs to networks with clear, differentiated demand: payments, stablecoins, tokenized assets, or businesses with existing distribution such as exchanges and financial firms. This shifts the role of Ethereum from a single scaling target to a settlement layer that applications can use when useful. The likely outcome is fewer broad-purpose rollups and more application-specific chains tied to real business needs.
