L2s appear to have beaten Ethereum: So why is ETH still a Billion-dollar bet?

Ethereum [ETH] remains to be the bottom layer that retains Web3 operating, however the exercise it as soon as hosted is now occurring elsewhere.

New knowledge exhibits Layer-2 networks are dealing with many of the ecosystem’s transactions, at the same time as Ethereum continues to energy the system beneath. It retains the “digital oil” thought alive, simply with the combustion shifting off-chain.

On the identical time, Ethereum’s personal numbers are cooling.

L2s now management most of Ethereum’s transaction move

Supply: Dune Analytics

The pie chart exhibits how Polygon, Arbitrum, and Optimism dominate whole transactions, leaving solely a small share for smaller rollups like Linea, Scroll, and zkSync.

This isn’t a one-off. Every day transaction knowledge exhibits Polygon and Arbitrum constantly processing between 2-4 million transactions a day, whereas Optimism provides extra exercise.

Collectively, these L2s deal with much more site visitors than Ethereum’s mainnet, so customers have clearly moved to cheaper, quicker layers.

What does that imply for Ethereum’s “digital oil” narrative?

The metaphor still resonates, particularly with EIP-1559’s charge burn and the long-held concept that Ethereum’s utility ought to assist its worth. And but, ETH provide has turned inflationary once more, at the same time as L2 utilization grows.

Supply: Arkham

Critics argue that is the results of income shifting off-chain, with sequencer charges and MEV captured by rollups as an alternative of returning to Ethereum itself.

Supporters counter that Ethereum’s position is evolving into core infrastructure, making it much less a commodity and extra the digital land the whole lot is constructed on.

A slower L1 doesn’t imply a weaker ETH

DeFiLlama knowledge exhibits TVL easing to round $66 billion, persevering with the downtrend by means of late 2025. Exercise is clearly migrating to L2s. But derivatives merchants aren’t treating ETH like a fading asset.

Supply: DeFiLlama

AMBCrypto beforehand reported that CryptoQuant CEO Ki Younger Ju flagged Ethereum as considerably undervalued, noting that 10 out of 12 valuation fashions present ETH buying and selling far under its truthful price.

On the time, the Composite Truthful Worth estimated ETH close to $4.8k, implying the asset was nonetheless round 59% undervalued regardless of macro weak spot.

Aggregated Open Curiosity stays elevated above $15 billion, and Funding Charges keep constantly optimistic. The market nonetheless costs ETH as core infrastructure fairly than a commerce persons are exiting.

Supply: Coinalyze

Whilst utilization thins on the bottom layer, the believers haven’t gone anyplace.

Remaining Ideas

• Ethereum’s worth case stays intact as L2 adoption surges and fashions nonetheless value ETH far above present ranges.
• Regardless of weaker L1 metrics, there’s confidence.