Catenaa, Thursday, January 01, 2026-The Layer 2 ecosystem saw uneven growth in 2025, with Coinbase’s Base and Arbitrum dominating usage and liquidity while most other L2s struggled to retain users after incentive programs ended.
Total value locked (TVL) on Base rose from $3.1 billion in January to over $5.6 billion in October, representing nearly 47% of all L2 DeFi TVL. Arbitrum remained stable around $2.8 billion, accounting for roughly 31% of the category.
Emerging L2s experienced rapid early activity tied to token generation events but lost momentum once rewards ended, highlighting the mercenary nature of on-chain participation.
User activity metrics also favored Base, with DEX volume, active wallets, and onchain interactions showing consistent growth.
Integrations with consumer-facing apps and protocols like Morpho, which expanded deposits from $354 million to over $2 billion, strengthened Base’s adoption. Broader OP Stack ecosystems, including World Chain, Soneium, INK and Unichain, also expanded distribution but retained limited retail traction.
Centralization remains a concern. Most L2s continue to rely on single operators for sequencing, upgrade keys, and data availability. ZK rollups largely depend on centralized proving circuits, while smaller optimistic rollups often lack trustless fraud proofs. Ethereum remains the preferred data-availability layer, with rollups leveraging blob-based systems to cut costs and optimize efficiency.
Bitcoin L2 projects continued to underperform, with TVL declining 74% and overall BTCFi assets totaling under 0.5% of circulating Bitcoin. Attempts to replicate Ethereum L2 functionality on Bitcoin chains failed to attract meaningful developer or liquidity activity.
Looking ahead, industry observers expect distribution through major consumer platforms to dictate 2026 adoption, with liquidity concentrating around leading networks and smaller L2s struggling to maintain relevance.
