More and more companies are attracted to the idea of launching their own Ethereum layer 2 network. Most of them shouldn’t bother. There’s already a staggering number of them — over 150. Quite a few of these are centralized and linked to a single enterprise and several companies such as Robinhood have recently announced plans to launch their own layer 2 networks.

The attractions for launching an Ethereum layer 2 network are significant, especially when compared to launching your own layer 1 (foundation layer) blockchain. Layer 1 networks must compete with networks like Ethereum and Solana in an already intensely competitive and crowded market. Layer 2 networks that run on top of Ethereum also face an intensely competitive marketplace but can simultaneously draw upon the strength of the Ethereum ecosystem, thanks to deep integration into Ethereum itself.

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Author: Paul Brody