Ethereum L2 decline theory? Co-founder Joe Lubin is optimistic about the future ecosystem, but ETF saw a capital outflow of 73.6 million dollars in a single day.

Ethereum (Ethereum) co-founder Joe Lubin emphasized at the Digital Asset Summit (DAS) held on March 20 that the maturity and security of the Mainnet have allowed developers more room to innovate on L1, and he is optimistic that various L2 scaling solutions will continue to grow in the future, but the market seems unconvinced by this statement.

Since the Dencun Cancun upgrade, Ethereum revenue has significantly decreased, leading to a decline in the price of ETH. Moreover, Ethereum ETFs have seen a net outflow for 11 consecutive days, with as much as $73.6 million in funds withdrawn. This indicates market concerns about the prospects of Ethereum L2.

Lubin stated that the key to the future lies in L2, with new solutions like MegaETH and Linea poised to take off.

Lubin stated on DAS that the security and network infrastructure provided by the Ethereum Mainnet has significantly helped developers focus on building applications. He pointed out that future applications will need to operate through a "high-performance blockchain database," which is exactly where L2 scaling solutions will come into play.

Lubin also specifically mentioned Linea, which focuses on internal development within Ethereum, along with another upcoming L2 scaling solution, Ether Giant (MegaETH).

Is L2 just a facade, with investors questioning "sucking blood without contribution"?

However, according to L2Beat data statistics, there are currently over 140 different Ethereum scaling solutions, including more than 60 rollup scaling solutions. However, this seemingly vibrant L2 ecosystem has led some investors to question whether it is "sucking blood without contribution."

They believe that while L2 has improved user experience and transaction efficiency, it has siphoned off a large volume of transactions and revenue from L1, and has not provided sufficient economic value back to the Mainnet, resulting in revenue loss and even dilution.

Currently, there are over 140 L2 scaling solutions. The Dencun upgrade makes L2 cheaper, but Mainnet revenue has plummeted by 99%.

Since the Ethereum-driven Cancun Dencun upgrade in March 2024, L2 transaction fees have significantly decreased, with the average gas plummeting by 95%. This is a great boon for users and developers, but it has also led to a 99% drop in Ethereum Mainnet revenue within six months, reaching a bottom in September 2024.

This drastic change has raised concerns among investors about whether Ethereum has entered the L2 decline theory, causing the Mainnet to lose its original value support.

( Ethereum Dencun Cancun upgrade completed, multiple L2s subsequently updated )

The price of cryptocurrencies is weakening, and ETFs have experienced net outflows for 11 consecutive days, leading to a colder market sentiment.

Under the dual pressure of a weakened overall market and declining Mainnet revenue, the price of ETH has fallen steadily since the second half of 2024, reaching a low of about $1,759 on March 11, 2025. Analysts predict that there may be further downward adjustments in the short term.

Meanwhile, according to data from Farside Investors, Ethereum-related ETFs have experienced net outflows for 11 consecutive days, with the worst day being March 13, 2025, when as much as 73.6 million dollars was withdrawn from Ethereum ETFs.

March 13, 2025, is considered the day with the highest net outflow for the Ethereum ETF, with $73.6 million in funds withdrawn.

Investors are increasingly shifting their funds towards cash, government bonds, or stablecoins and other low-volatility assets, indicating a decline in confidence in risk assets.

L2 is a solution or a risk, the future of Ethereum remains to be seen.

Although Joe Lubin is confident about the vision of the Ethereum ecosystem and L2, the actual market trends show that there are still doubts about whether the value of the Ethereum Mainnet will be diluted by L2.

In the context of sluggish coin prices, collapsing Mainnet revenue, and signs of continuous capital withdrawals from ETFs, whether the future L2 ecosystem can truly become a driving force for the next wave of growth for Ethereum, or if it is merely a short-term trend, is worth ongoing observation.

(When Vitalik's favored world computer MegaETH meets the new generation DEX that market makers are paying attention to, GTE completes community financing )

This article discusses the decline theory of Ethereum L2? Co-founder Joe Lubin is optimistic about the future ecosystem, but ETF saw a withdrawal of funds reaching 73.6 million USD in a single day, first appearing in Chain News ABMedia.