In recent months, a raft of alt-L1s joined Ethereum to become L2s, even as other projects on L2s switch back to the Ethereum mainnet.
The Ethereum L1 is reasserting its claim to be the home of high-value DeFi — it has seven times more TVL than its nearest rival — while the L2 model offers millions in potential savings, along with network effects for alt-L1s that join the ecosystem.
Back in March, when bearishness around the “extractive” L2 roadmap was at its peak, mobile payments network Celo quietly closed down its validator network to become an L2. Now, it’s saving almost $7 million a year in operating costs.
In August, blockchain gaming L1 Ronin announced it was coming home to Ethereum in early 2026, five years after network congestion forced its popular game Axie Infinity off mainnet.
“Ethereum has largely delivered on the scaling roadmap,” says Jeffrey “Jiho” Zirlin, co-founder of Sky Mavis, which built both the game and alt-L1.
That same month, OG DeFi project Synthetix, which led the charge to Optimism in 2021, revealed it would shutter its L2 franchises to tap the enormous liquidity that refuses to budge from mainnet. It’s launching a Hyperliquid-style perp DEX with a flashy trading competition for high-profile influencers like Ansem and Degen Spartan.
In September, Aave announced a proposal to shutter half of its under-performing instances, which have spread out like McDonald’s across L2s and other chains like Avalanche, BNB Chain, Fantom and Harmony. Despite five years of expansion, 86% of Aave’s revenue is still generated on Ethereum’s L1.
And so far this month, Consensys founder Joe Lubin has confirmed that global banking alliance Swift is building its crypto payments system on the Linea L2, and Polkadot AI agent project Phala voted to become an L2 because that’s “where developer activity, liquidity, and tooling are strongest.”
The movement back to Ethereum reflects growing optimism that the scaling roadmap might actually work, especially now there’s a credible plan to scale the L1 using gas limit increases and ZK tech. DeFi projects can happily throw resources into building on the L1 without worrying that it will grind to a halt if activity increases.
“We believe that there’s now enough of a commitment and enough action that we’ve seen from the Foundation and developers to scale the L1,” says lead engineer Ben Celermajer of Syntetix’s decision to return.
Projects with different needs can take advantage of cheap security and higher throughput on the L2s, which will get up to an 8X data capacity increase in 2026.
It’s not all one-way traffic, though: fantasy sports NFT project Sorare saw a big uptick in volume after jumping ship to Solana this month, and Circle and Stripe recently announced competing L1s, Arc and Tempo.
But Ethereum fans take comfort in the fact that those stablecoin L1s are EVM-compatible.
“I believe that they’ll eventually become an L2,” says Zirlin. “Maybe at the beginning, kind of like us, they want the flexibility in some ways to do what they want, and eventually they’ll come home to Ethereum.
“All EVM L1s are future L2s,” he says.
Synthetix returns to Ethereum mainnet
After spending a couple of years in the wilderness, Synthetix is already reaping the rewards of coming home to mainnet, with a God candle earlier this week.
Its new Central Limit Order Book (CLOB) perp DEX hopes to attract attention with its trading comp this month, and aims to attract traders with size when it launches at the end of next month.
It’s yet another sharp turn for Synthetix, which began life as a stablecoin project, pivoted to synthetic assets to ride the yield farming boom above $30 in 2021, before reinventing itself as an AMM-style perp DEX in 2023.
For most of the past year, the unwinding of its old staking system has seen its stablecoin, SUSD, off the peg, but Synthetix v4 has recruited 80% new team members to start afresh.
Founder Kain Warwick, who returned to lead the project again earlier this year, admits that “Synthetix lost its way” for several reasons, but says that Layer L2s ultimately constrained its growth.
The leap to Optimism in 2021 was unavoidable, as gas fees for even claiming weekly rewards were around $100 on mainnet. It later set up shop on Arbitrum and Base and started work on an app chain called SNAXchain.
“That path was perps everywhere,” Celermajer tells Magazine during an interview at Token2049. “They were going to launch on Solana and Sui too.”
By the middle of last year, it was clear the project…
cointelegraph.com