Ethereum L2 TVL Falls to $5 Billion, Two-Year Low as Optimistic Rollups Dominate

According to The Block's Data & Insights, Ethereum Layer 2 networks' total value locked has declined to approximately $5 billion, reaching the lowest level since 2023. Optimistic rollups including Optimism, Base, and Arbitrum continue to dominate, accounting for $4.8 billion or 96% of total L2 TVL, undoing most of the ecosystem growth built during 2024.

Meanwhile, traditional finance institutions previously expected to strengthen Ethereum's institutional presence have increasingly embraced alternative blockchains. The DTCC has begun tokenizing Treasuries on multiple networks, while JPMorgan has expanded JPM Coin across multiple public blockchains beyond Ethereum.