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

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.

The collapse in revenue signals a shift in both user activity and developer trust. While Arbitrum, Optimism, and Base continue to draw volume and usage, lesser-known L2s are struggling to maintain relevance.

The drop in income can largely be attributed to declining transaction fees and minimal DeFi activity. This suggests users are exiting these platforms or simply not engaging at the same rate.

Besides low usage, market sentiment toward minor L2s has also weakened due to unclear roadmaps, lack of liquidity, and fragmented communities. Consequently, investors are opting for networks that show consistent updates, ecosystem growth, and integrations with major dApps and protocols.

Among the leading L2 tokens, Base is trading at with highly volatile intraday swings. Resistance is firm at $0.0000033, while support appears at $0.00000305.

Daily volume is low at $12.9K, indicating thin liquidity and high price risk. The token’s large supply of 929.45 billion limits its upside potential unless demand spikes dramatically.

Arbitrum’s token (ARB) hovers around , showing a V-shaped recovery after to $0.295. Resistance levels include $0.307 and $0.310, while $0.295 and $0.300 serve as critical support points. Despite minor pullbacks, the trend remains stable.

Optimism (OP), priced at , reflects a bullish accumulation pattern. With support at $0.560 and resistance around $0.575, the token shows short-term strength. A breakout above $0.575 may lead to a move toward $0.585.