The entire layer-2 system's TVL has accelerated to exceed 51 billion USD, is Ethereum at risk of being "swallowed"?

Although Layer-2 scaling solutions bring many benefits in terms of scalability, they can also "suck back" the value of Ethereum. The total value locked (TVL) across the entire Layer-2 ecosystem has surged past $51 billion, a 211% growth compared to 2023, raising concerns about the risk of Ethereum being "swallowed up". Arbitrum One is the largest network with over $18.38 billion in TVL, accounting for 35% of the total L2 ecosystem TVL. Base is second with $11.59 billion in TVL, contributing 22% to the total. In the week prior to November 28th, Arbitrum grew its TVL by over 12%, while Base achieved an 11.4% growth. Despite the presence of other L2 networks, Arbitrum and Base remain the dominant leaders. An important milestone for Base was on November 26th, when it surpassed 106 transactions per second (TPS), setting a new record for transaction processing speed. Base also reached the $10 billion TVL mark for the first time. The Dencun upgrade of Ethereum, deployed in March, played a crucial role in driving transaction fee stability and scalability for L2s. This was one of the largest upgrades since The Merge, addressing issues related to high transaction fees and congestion on the Ethereum mainnet. While L2 networks are experiencing rapid growth and bringing many benefits to the Ethereum ecosystem, there are concerns about the risks of liquidity fragmentation and potential negative impacts on Ethereum's revenue. The strong development of L2s could affect Ethereum's value growth as more transactions and asset value shift to L2s instead of remaining on the primary network. Industry experts warn that L2 scaling solutions may "eat back" Ethereum's revenue. However, the progress of networks like Arbitrum and Base, combined with the transaction fee stability from the Dencun upgrade, suggests a promising future for Ethereum in terms of scaling and improving user experience. Also Read: Ethereum Staker Revenue Drops Sharply from March Peak On the other hand, the price of ETH and many other tokens has been surging strongly. Since the beginning of November, the price of ETH has increased by more than 35%.