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12/05 11:32

Is Ethereum Losing Value? Exploring Layer 2’s Impa

Is Ethereum Losing Value? Exploring Layer 2’s Impact
Ethereum Price Near $3,200 Margin as Analysts Suggest Further Losses Through Layer 2 Issues

Ethereum’s price drop is linked to reduced mainnet fees and rising activity on Layer 2 networks.

L2 growth has shifted revenue away from ETH, lowering burn and weakening short-term value capture.

Future upgrades and revenue-sharing models may reconnect L2 expansion with stronger ETH value.

Ethereum price is hovering near $3,100–$3,200 at press time, down from its August peak near $4,950. This represents a decline of about 45%. At the same time, Ethereum’s on-chain fees have decreased, ETFs have seen significant outflows, and user activity has shifted heavily to Layer 2 networks such as Arbitrum, Optimism, and Base.

Despite this, Ethereum remains the leading smart-contract platform and continues to dominate decentralized finance (DeFi). The real issue is not simply the price of ETH, but how Ethereum captures value in a world where most transactions now happen on L2s.

The Rise of Layer 2s
Layer 2 networks are built on top of Ethereum to increase speed and reduce costs. Most L2s are rollups, which bundle transactions and submit them to Ethereum for final settlement. This structure makes them extremely efficient.

By late 2025, Ethereum L2s collectively secure more than $40 billion in value. They host hundreds of thousands of daily users and handle billions of dollars in monthly transaction volume.

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