Coinbase’s Base Emerges as Dominant Force in L2 Consolidation
A new report from 21Shares paints a stark picture for the future of Ethereum's Layer-2 (L2) scaling landscape, predicting a brutal consolidation that could see the majority of networks fail to survive beyond 2026. The analysis highlights a dramatic centralization of activity and value, with three major players—Base, Arbitrum, and Optimism—now commanding nearly 90% of all L2 transactions. This triumvirate's tightening grip is creating an increasingly hostile environment for smaller, independent rollups, many of which are already on life support. Since June, activity on these minor chains has plummeted by a staggering 61%, with numerous networks degrading into so-called 'zombie chains.' These networks continue to operate technically but are characterized by minimal user activity and rapidly vanishing liquidity, rendering them economically unviable. This consolidation trend underscores a critical shift in the L2 narrative, moving from a period of explosive experimentation to one of market maturation and survival of the fittest. The dominance of Base, the L2 network incubated and launched by the major U.S. cryptocurrency exchange Coinbase, is particularly noteworthy. Its rapid ascent, fueled by deep integration with Coinbase's massive user base and seamless fiat on-ramps, demonstrates the powerful advantage of strong institutional backing and distribution in this competitive arena. Meanwhile, Arbitrum and Optimism, as early pioneers with established ecosystems and developer communities, have solidified their positions. The report suggests that for the multitude of other L2 solutions, the path forward is exceedingly narrow. They must either carve out a highly specialized, defensible niche, secure monumental funding to weather the storm, or face obsolescence. This impending shakeout has significant implications for developers, investors, and users, who must now navigate a landscape where network effects are becoming overwhelmingly powerful and the risk of building on or investing in a failing chain is higher than ever. The prediction for a post-2026 landscape is one of a handful of robust, general-purpose L2s, led by Base, Arbitrum, and Optimism, surrounded by perhaps a few surviving niche players, with the rest having merged or vanished entirely.
Most Ethereum L2s May Not Survive 2026 as Base, Arbitrum, Optimism Tighten Grip: 21Shares
The Ethereum Layer-2 ecosystem faces a brutal consolidation, with 21Shares predicting most scaling networks won't survive beyond 2026. Base, Arbitrum, and Optimism now command nearly 90% of all L2 transactions, leaving smaller rollups to wither. Activity on minor chains has plummeted 61% since June, with many becoming 'zombie chains'—operating with minimal users and vanishing liquidity.
Market share has rapidly concentrated around three dominant players: Coinbase-backed Base processes over 60% of L2 transactions alone, while Arbitrum and Optimism round out the triumvirate. This leaves dozens of competing networks struggling for relevance. Kinto and Loopring have already retreated, signaling a coming wave of failures.
The Darwinian shift reflects Ethereum's maturation—high-performance, well-capitalized networks with institutional backing are squeezing out marginal players. As liquidity follows activity, the L2 landscape appears destined to consolidate around ETH-aligned heavyweights and exchange-backed powerhouses.
Coinbase Deepens Solana Integration With Native DEX Trading
Coinbase has activated native decentralized exchange (DEX) trading for Solana-based tokens within its mobile app, marking the platform's first on-chain swap capability for the blockchain. The feature, confirmed by protocol specialist Andrew, settles trades in USDC while maintaining traditional payment rails like fiat and debit.
The move follows August's Base-network DEX rollout and meets Coinbase's year-end solana integration target. It coincides with the exchange's 'everything app' ambition—a fusion of custodial and on-chain trading. Earlier this month, Coinbase announced its acquisition of Vector, a Solana-native trading platform whose real-time asset detection tools will enhance Coinbase's DEX infrastructure.
JPMorgan Settles $50M Galaxy Digital Commercial Paper on Solana Using USDC
JPMorgan executed a landmark transaction by issuing and settling a $50 million Galaxy Digital commercial paper entirely on the Solana blockchain using USDC. Coinbase Global and Franklin Templeton participated as buyers of the short-term debt instrument, with all payments processed through Circle's dollar-pegged stablecoin.
The bank developed a specialized USCP token to facilitate the offering, overseeing the end-to-end issuance process. Scott Lucas, JPMorgan's Markets Digital Assets lead, revealed plans to expand the program in 2024 by incorporating additional investor categories and security types, citing growing institutional demand for blockchain-based settlement of traditional financial instruments.
For Galaxy Digital, this marks its maiden commercial paper issuance. The firm highlights how blockchain infrastructure enables access to institutional investors increasingly allocating to on-chain assets. Galaxy Digital Partners LLC acted as structuring agent for the transaction, with trading head Jason Urban emphasizing the operational efficiencies gained through public blockchain settlement.
