Ethereum’s push toward Layer-2 (L2) scalability could be a “double-edged sword” for Ether ($ETH ), potentially reducing the value accrual to the Ethereum mainnet, according to a recent report by Binance Research.
While L2 networks aim to improve Ethereum’s scalability and lower transaction costs, they may also fragment liquidity and developer attention, leading to a decrease in Ether’s demand. Binance Research noted that competitors like Solana and BNB Smart Chain are gaining ground in the decentralized exchange (DEX) space, threatening Ethereum’s dominance.
Despite future upgrades like Pectra (May 7) and Fusaka (late 2025) aimed at enhancing Ethereum’s scalability and data handling, these changes won’t immediately address the challenges of L2 scaling. The report highlighted that Ethereum’s economic incentives may continue to struggle as L2 adoption grows.
One potential solution is the development of rollups, which contribute more to Ethereum’s fee revenue compared to other L2 solutions. Ethereum’s success in maintaining value accrual will depend on aligning incentives with L2 networks, as well as the growing demand for Ethereum’s data availability layer.
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