Marc Boiron, CEO of Polygon Labs, identifies the intense competition among Ethereum layer-2 networks as the primary challenge facing the second-largest cryptocurrency by market capitalization.

In a post on social media platform X on April 7, Boiron highlighted how this competition results in Ethereum continuously undermining itself. He expressed:

"The main issue Ethereum faces is the ongoing internal competition among all Layer 2 solutions, which vie for developers, users, and liquidity within the Ethereum ecosystem instead of expanding beyond it. Basic microeconomic principles suggest this is an unfavorable strategy. While I don't have a solution, this issue needs addressing."

Many members of the crypto community echo Boiron's sentiments, arguing that Layer 2 networks should focus on attracting users and applications from outside the Ethereum ecosystem. Karthik Senthil, a venture partner at crypto hedge fund Lattice, commented:

"Layer 2 networks can only succeed if they significantly expand the market and attract the majority of applications and users that currently operate outside Ethereum. If we compete for the same users already within the ecosystem, no one benefits."

Boiron also shared a social media post advocating for Layer 2 networks to adopt a long-term perspective and celebrate each other's successes. The post suggests:

"As interoperability and chain abstraction become more prevalent, Layer 2 networks should reconsider the value of poaching applications from one another. A successful application on one Layer 2 network can enhance the value of another. Poaching applications undermines this potential value."

Nevertheless, some community members argue that competition among Layer 2 networks could ultimately strengthen Ethereum's ecosystem.

Layer 2 networks are blockchain solutions designed to improve Ethereum's scalability. They have gained significant traction and adoption within the crypto industry in recent years.

According to data from L2Beat, these networks collectively process 123 transactions per second, outpacing Ethereum's mainnet by a factor of 10.7. Notably, Coinbase's Base network and Arbitrum, the largest Layer 2 blockchain, have recorded higher transaction volumes than Ethereum's mainnet in recent days.

Moreover, the number of active wallets utilizing Layer 2 networks exceeded five million at the beginning of the month. Additionally, the total value of assets locked on these platforms has surpassed $42 billion, with indications suggesting continued growth in the future.