📝 Editor's Note:

Welcome to OurNetwork's latest. In this issue we're looking at Layer 2s, the scaling solution pioneered by the Ethereum community. 

Layer 2s (L2s) have been a major strategic flashpoint in the crypto space.

Proponents of the technology, which separates execution from settlement, argue that L2s allow for uncompromised scaling and security. On the flip side, detractors say monolithic architectures like Solana's offer better trade-offs in terms of user experience, composability, and liquidity. 

While battles over the best way to scale blockchains continue on social media, in the end the market will decide on winners. For now, though, growthepie, Seoul Data Labs, and Patryk Krasnicki are checking in with the latest for the L2 side of the equation.

Enjoy and happy holidays.

– ON Editorial Team

Sector Overview | Arbitrum | Base

• October was the biggest month yet for L2 app revenue, hitting a new high of $228M. Due to power-law dynamics common in crypto, the top 3 L2s contribute over 90% of the total (Base ~55%, Arbitrum One ~32%, Linea ~4.5%). Combined L2 app revenue is still ~6x smaller than Ethereum L1 - but this gap has narrowed from 15x in 2023 and 8x in 2024. With the success and growing number of Layer 2s, we can expect app revenue to outpace the L1 in the future.

• There are currently 101 L2s with over $100k total value secured. Recently, some L2s have wound down, but this has largely been offset by new additions. Once the less successful L2s from the first wave have been flushed out, this chart should resume its upward trend.

• L2s are posting more data to Ethereum blobs - Over the last 6 months, blobs have grown their market share from ~41% to 54%, with upcoming BPO forks set to further boost supply. However, new high-throughput L2s such as MegaETH (EigenDA) and Rise (Celestia) could reverse this trend.

• Base’s all-time revenue has surpassed $178M, accounting for roughly 24% of total L2 revenue and putting it well ahead of Arbitrum at $134M and Optimism at $115M. This lead highlights a clear gap between Base and the rest of the L2 pack in terms of fee generation and economic traction. Building on this momentum, the recent launch of Base App, along with a rumored product release speculated to involve a token, prediction markets, or tokenized stocks, could further reinforce its dominance.

• Supported by products like Base App and its integration with Coinbase, total transactions on Base have trended upward with daily averages now hovering around 10M and all-time transactions approaching 5B since launch.

• As part of Base’s expansion, the Solana–Base bridge launched in early December 2025 to enable cross-chain asset trading. Bridge usage has not materially grown beyond the initial transfer of ~43.8K SOL, and more than 83% of bridged assets remain parked in Uniswap and Aerodrome liquidity pools.

• ArbitrumDAO reached a monthly revenue high of $4.4M in October. 92.5% of revenue generation was driven by its core blockspace in 2025, including transaction fees paid to Arbitrum One’s sequencer and its Timeboost auctions. This revenue is key to Arbitrum's vision for a self-sustaining "Digital Sovereign Nation," whereby ArbitrumDAO drives value to stakeholders via a growth flywheel comprising revenue generation, ecosystem investment programs, and economic zones of opportunity.

• Arbitrum is a prime candidate to introduce a native stablecoin in 2026, similar to MegaETH's USDm and Hyperliquid's USDH. Assuming it grows to 5% of Arbitrum One’s stablecoin market cap of $4.23B (excluding Hyperliquid), the stablecoin's $211M in backing assets would generate $7.4M in annual yield.

• Arbitrum Chains are required to share 10% of sequencer profit with ArbitrumDAO. This revenue was minuscule in 2025, accounting for less than 1% of total revenue, but should expand exponentially with the launch of Robinhood Chain in 2026.