24 posts tagged with "Layer 2"

When Robinhood announced it was building an Ethereum Layer 2 using Arbitrum's technology in June 2025, it signaled something far more significant than another exchange adding blockchain features. It marked the moment when "enterprise rollups"—Layer 2 networks built or adopted by major corporations—became the defining trend reshaping Ethereum's scaling narrative. But as Kraken, Uniswap, and Sony follow suit, a critical question emerges: are we witnessing the democratization of blockchain infrastructure, or the beginning of corporate capture?

The numbers tell a compelling story. Layer 2 Total Value Locked has surged from under $4 billion in 2023 to roughly $47 billion by late 2025. Transaction costs have plummeted below $0.01, and average throughput now exceeds 5,600 transactions per second. Yet beneath these impressive metrics lies an uncomfortable truth: the Layer 2 landscape has bifurcated into a handful of winners and a graveyard of ghost chains.

The Great L2 Consolidation​

2025 exposed the brutal reality of Layer 2 economics. While Base, Arbitrum, and Optimism collectively process nearly 90% of all L2 transactions, most new launches have become ghost towns shortly after their token generation events. The pattern is distressingly consistent: incentive-driven activity ahead of airdrops, followed by rapid collapse as liquidity and users migrate elsewhere.

This concentration has profound implications. The Optimism Superchain now accounts for 55.9% of all L2 transactions, with 34 OP Chains securing billions in value. Base alone represents 46.6% of all L2 DeFi TVL, extending what has been essentially uninterrupted exponential growth since launch. Arbitrum maintains roughly 31% of L2 DeFi TVL, though its position increasingly depends on institutional adoption rather than retail speculation.

The lesson is clear: distribution and strategic partnerships, not technical differentiation, are becoming the primary drivers of L2 success.

The Four Horsemen of Enterprise Rollups​

Robinhood: From Brokerage to Blockchain​

When Robinhood unveiled its Arbitrum-based Layer 2 in June 2025, it came with an audacious proposition: tokenize 2,000+ stocks and bypass traditional market hours entirely. The initiative, dubbed "Stock Tokens," allows European customers to trade U.S. stocks and ETFs on-chain with zero commission fees, complete with dividend payments within the brokerage app.

What makes Robinhood's approach notable is scope. The tokenized offerings include not just public equities but privately traded giants like OpenAI and SpaceX—assets previously inaccessible to retail investors. CEO Vlad Tenev positioned it as "showing what's possible when crypto meets transparency, access, and innovation."

The Arbitrum Foundation has since claimed that institutional finance moved from trials to production on its stack, citing Robinhood's tokenized equities rollout alongside RWA deployments with Franklin Templeton, WisdomTree, BlackRock, and Spiko.

Kraken: The Ink Revolution​

Crypto exchange Kraken launched its Layer 2 "Ink" ahead of schedule in December 2024, built on Optimism's OP Stack and integrated into the broader Superchain ecosystem. The network received 25 million OP tokens in grants from the Optimism Foundation—a substantial vote of confidence.

Ink's strategy differs from Robinhood's equity focus. The Ink Foundation announced plans to launch and airdrop an INK token, directly challenging Coinbase's Base for exchange-affiliated L2 dominance. The ecosystem already features Tydro, a white-label instance of Aave v3 that supports the INK token, positioning Ink as a full-fledged DeFi destination rather than a mere extension of exchange services.

With Kraken considering an IPO as early as Q1 2026, Ink represents a strategic asset that could significantly enhance the company's valuation by demonstrating blockchain infrastructure capabilities.

Uniswap: DeFi's Native Chain​

Uniswap's Unichain officially launched on February 11, 2025, after four months of testnet activity that saw 95 million transactions and 14.7 million smart contracts deployed. Unlike corporate entrants, Unichain represents DeFi's first attempt to own its own execution environment.

The technical specifications are impressive: one-second block times at launch, with 250-millisecond "sub-blocks" promised soon. Transaction costs run approximately 95% lower than Ethereum L1. But Unichain's most significant innovation may be philosophical—it's the first L2 to build blocks inside a trusted execution environment (TEE), bringing unprecedented transparency to block building while mitigating extractive MEV.

Crucially, Unichain transforms UNI from a governance token into a utility token. Holders can stake to validate transactions and earn sequencer fees, creating economic alignment between the protocol and its community. Nearly 100 major crypto products are already building on Unichain, including Circle, Coinbase, Lido, and Morpho.

Sony: Entertainment Meets Web3​

Sony's Soneium, launched January 14, 2025, represents the most ambitious corporate Web3 bet outside the financial sector. Built with Startale Labs, Soneium positions itself as a "versatile general-purpose blockchain platform" for gaming, finance, and entertainment applications.

The traction has been substantial: over 500 million transactions, 5.4 million active wallets, and more than 250 live decentralized applications. Sony doubled down with an additional $13 million investment in Startale in January 2026, specifically to scale "on-chain entertainment infrastructure."

Soneium's killer app may be IP integration. The platform supports flagship properties including Solo Leveling, Seven Deadly Sins, Ghost in the Shell, and Sony's robotic companion aibo. With Sony owning some of the world's most valuable intellectual property—God of War, Spiderman—Soneium allows the entertainment giant to control how that IP is used in the digital world.

The "Soneium For All" incubator, launched with funding up to $100,000 per project, targets MVP-ready gaming and consumer applications, while Sony Bank plans to issue a dollar-pegged stablecoin for use within Sony's gaming, anime, and content ecosystems by fiscal year 2026.

The Architecture of Enterprise Adoption​

The enterprise rollup trend reveals a clear preference for established, battle-tested infrastructure. All four major enterprise entrants chose either OP Stack (Kraken, Sony, Uniswap) or Arbitrum (Robinhood) rather than building from scratch or using newer alternatives.

This standardization creates powerful network effects. The Superchain model means that Ink, Soneium, and Unichain can interoperate through native cross-chain messaging, sharing security and governance. Optimism's upcoming Interop Layer, planned for early 2026, will enable single-block, cross-chain message passing among Superchain L2s—a technical capability that could make chain-hopping as seamless as tab-switching.

For enterprises, the calculus is straightforward: proven security, regulatory clarity, and ecosystem integration outweigh the theoretical benefits of technical differentiation.

Privacy, Compliance, and the ZK Alternative​

While OP Stack and Arbitrum dominate enterprise adoption, ZK rollups are carving out a distinct niche. ZKsync's Prividium framework sets benchmarks for enterprise-grade privacy, combining high throughput with robust confidentiality. The platform now offers Managed Services to help institutions launch and operate dedicated ZK Stack rollups with enterprise-grade reliability.

ZK rollups (Starknet, zkSync) now achieve 15,000+ TPS at $0.0001 per transaction, enabling institutional-grade scalability and compliance for tokenized assets. For high-value transactions, institutional use cases, and privacy-sensitive applications, ZK-based solutions increasingly represent the technology of choice.

The 2026 Outlook: Consolidation Accelerates​

Projections for 2026 suggest continued concentration. Analysts predict that by Q3 2026, Layer 2 TVL will exceed Ethereum L1 DeFi TVL, reaching $150 billion versus $130 billion on mainnet. Galaxy Digital estimates that Layer 2 solutions could process 80% of Ethereum transactions by 2028, up from approximately 35% in early 2025.

Institutional adoption continues accelerating, driven by regulatory clarity from the GENIUS Act and MiCA, alongside L2 innovations like ZK rollups and modular blockchains. According to recent surveys, 76% of global investors plan increased crypto allocations by 2026, prioritizing L2s with interoperability, governance frameworks, and traditional finance integration.

The market cap of tokenized public-market RWAs has already tripled to $16.7 billion as institutions adopted blockchains for issuance and distribution. BlackRock's BUIDL has emerged as the reserve asset underpinning a new class of on-chain cash products, validating the enterprise rollup thesis.

What This Means for Ethereum​

The enterprise rollup wave fundamentally changes Ethereum's strategic position. Public blockchains, especially Ethereum, are transitioning from experimental sandboxes to credible institutional infrastructure. Ethereum's established financial primitives and strong security model make it the preferred settlement layer—not for retail speculation, but for institutional capital markets.

Yet this transition carries risks. As major corporations build proprietary L2s, they gain significant control over user experience, fee structures, and data access. The permissionless ethos of early crypto may increasingly conflict with enterprise requirements for compliance, KYC, and regulatory oversight.

The coming years will determine whether enterprise rollups represent blockchain's path to mainstream adoption or a Faustian bargain that trades decentralization for distribution.

The Bottom Line​

The enterprise rollup wars have redefined what success looks like in the Layer 2 landscape. Technical superiority matters less than distribution channels, brand trust, and regulatory positioning. Robinhood brings 23 million retail traders. Kraken brings institutional credibility and exchange liquidity. Uniswap brings DeFi's largest protocol ecosystem. Sony brings entertainment IP and 100 million PlayStation users.

This is not the permissionless revolution early crypto advocates imagined—but it may be the one that actually scales. For developers, builders, and investors navigating 2026, the message is clear: the era of "launch a chain and they will come" is over. The era of enterprise rollups has begun.

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BlockEden.xyz provides enterprise-grade RPC and API services across major blockchain networks including Ethereum L2s like Arbitrum, Optimism, and Base. For teams building the next generation of enterprise blockchain applications, explore our infrastructure solutions.

For years, critics had a point: Ethereum's Layer 2 networks weren't really trustless. Sure, they promised fraud proofs—mechanisms that let anyone challenge invalid transactions—but those proofs were either non-existent or restricted to whitelisted validators. In practice, users trusted operators, not code.

That era ended in 2024-2025. Arbitrum, Optimism, and Base have all deployed permissionless fraud proof systems, achieving what L2Beat classifies as "Stage 1" decentralization. For the first time, the security model these rollups advertised actually exists. Here's why this matters, how it works, and what it means for the $50+ billion locked in Ethereum L2s.

What if you could trade Apple stock at 3 AM on a Sunday, settle the transaction in seconds instead of days, and hold it in a wallet you actually control? That future is no longer hypothetical. Robinhood, the trading platform that sparked the retail investing revolution, is building its own Ethereum Layer 2 blockchain on Arbitrum — and it could fundamentally change how the world trades securities.

The company has already tokenized nearly 2,000 U.S. stocks and ETFs worth approximately $17 million, with plans to expand to private equity giants like OpenAI and SpaceX. This isn't just another crypto project; it's a brokerage with 24 million users betting that blockchain will replace the antiquated plumbing of traditional finance.

From Brokerage to Blockchain: Why Robinhood Built Its Own L2​

When Johann Kerbrat, Robinhood's crypto chief, announced the Layer 2 blockchain at EthCC in Cannes, he revealed the strategic calculus behind the decision: "The main discussion for us at this point was, really, should we do an L1 or should we do an L2, and the reason why we decided to do an L2 was we wanted to get the security from Ethereum, the decentralization from Ethereum, and also the liquidity that is part of the EVM space."

Launching a new Layer 1 would have required bootstrapping validators, liquidity, developer tools, and user trust from scratch. By building on Arbitrum's Orbit framework, Robinhood inherits Ethereum's battle-tested security while gaining the customization options needed for regulated financial products.

The Robinhood Chain is designed for tokenized real-world assets, with native support for:

• 24/7 trading — no more waiting for markets to open
• Seamless bridging — moving assets between chains without friction
• Self-custody — users can hold assets in their own wallets
• Custom gas tokens — potentially using HOOD or a stablecoin for fees
• Enterprise governance — meeting regulatory requirements while maintaining decentralization

The chain is currently on a private testnet, with a public launch expected in 2026. In the meantime, Robinhood's tokenized stocks are already live on Arbitrum One, Ethereum's largest rollup by activity.

2,000 Tokenized Stocks: What's Actually Trading On-Chain​

Robinhood's tokenized equity lineup has expanded from roughly 200 assets at launch to over 2,000 U.S.-listed stocks and ETFs. According to Entropy Advisors data on Dune Analytics, the total value of these tokens sits just under $17 million — modest by crypto standards, but significant as a proof of concept for regulated securities on public blockchains.

These tokens mirror the economic rights of their underlying assets, including dividend distributions. When Apple pays its quarterly dividend, tokenized AAPL holders receive their proportional share. Settlement happens entirely on-chain via Arbitrum, bypassing the traditional T+1 (and formerly T+2) clearinghouse system that has governed stock trading for decades.

European customers currently have access to 24/5 trading — meaning the market is open around the clock during weekdays. Full 24/7 trading is on the roadmap once the Robinhood Chain launches.

Perhaps most notably, Robinhood has also made tokenized shares of pre-IPO companies like OpenAI and SpaceX available, providing retail access to typically illiquid private markets that have historically been reserved for accredited investors.

The Settlement Problem Robinhood Wants to Solve​

Five years after Robinhood stunned users by halting buys on GameStop and other meme stocks during the 2021 trading frenzy, CEO Vlad Tenev has been vocal about how blockchain could prevent such scenarios from recurring.

The core issue was settlement risk. When trades take one or more days to settle, clearinghouses must hold collateral against potential failures. During periods of extreme volatility, those collateral requirements can spike dramatically — as they did during the meme stock mania, forcing Robinhood to restrict trading on certain securities.

"In a world of 24-hour news cycles and real-time market reactions, T+1 is still far too long," Tenev wrote in a recent op-ed. "Friday trades can still take days to settle."

Tokenized securities solve this by enabling near-instant settlement. When you buy a tokenized stock, the transaction finalizes in seconds or minutes rather than days. "No lengthy settlement period means much less risk to the system and less pressure on both clearinghouses and brokerages," Tenev explained, "so customers can freely trade how they want, when they want."

He believes the transformation is inevitable: "Imagine explaining to someone in 2035 that markets once closed on weekends."

Enterprise Rollups: A New Paradigm for Institutional Blockchain​

Robinhood isn't alone in pursuing this strategy. 2025 marked the rise of what analysts call "enterprise rollups" — major institutions launching their own Layer 2 infrastructure rather than building on existing public chains.

The trend accelerated rapidly:

• Kraken launched INK, its own L2 using the OP Stack
• Uniswap shipped UniChain for optimized DeFi trading
• Sony launched Soneium for gaming and entertainment applications
• Coinbase continues expanding Base, now the second-largest L2 by daily transactions
• Robinhood chose Arbitrum Orbit for maximum customization around RWA tokenization

The strategic insight is becoming clear: L2s win by distributing their infrastructure outward and partnering with large platforms rather than operating in isolation. A chain with 24 million existing users (Robinhood's customer base) or 56 million verified users (Coinbase's Base potential) starts with distribution advantages that pure-play crypto chains can't match.

Layer 2 Total Value Locked has grown from roughly $4 billion in 2023 to approximately $47 billion by late 2025 — a nearly 12x increase. Daily L2 transactions have exceeded 1.9 million, eclipsing Ethereum mainnet activity.

Why Arbitrum Orbit? The Technical Foundation​

Robinhood specifically chose Arbitrum Orbit rather than alternatives like the OP Stack or building a ZK-rollup. Orbit allows the creation of highly customizable chains while inheriting Arbitrum's security model.

Key technical advantages include:

EVM Compatibility: Orbit chains are 100% compatible with the Ethereum Virtual Machine, meaning every smart contract that works on Ethereum works on the Robinhood Chain without modification. This opens the door to DeFi integrations — lending against tokenized stock positions, using stocks as collateral, or creating structured products.

Custom Gas Tokens: Orbit chains can use select ERC-20 tokens for gas fees instead of ETH. Robinhood could theoretically denominate transaction costs in USDC or even its own HOOD token, improving user experience for customers who don't want to hold ETH.

Configurable Governance: Unlike Arbitrum One and Nova, which are governed by the Arbitrum DAO, Orbit chains allow builders to determine their own governance structures. For a regulated brokerage, this means meeting compliance requirements around validator selection and network operation.

Data Availability Options: Orbit supports both full rollup mode (posting all data to Ethereum) and AnyTrust mode (using a data availability committee for lower fees). Robinhood can optimize for cost versus decentralization based on the asset class being traded.

Arbitrum Orbit launched in March 2023 and has since become the foundation for numerous enterprise blockchain deployments. The framework's flexibility makes it particularly suited for regulated entities that need to customize network parameters while maintaining Ethereum security.

The $18.9 Trillion Opportunity​

Robinhood is positioning itself at the intersection of two massive trends: the $18.9 trillion tokenized asset opportunity and the continued growth of retail crypto adoption.

According to a joint report from Ripple and Boston Consulting Group, the tokenized asset market will grow from $0.6 trillion today to $18.9 trillion by 2033, representing a compound annual growth rate of 53%. In an optimistic scenario, the figure could reach $23.4 trillion.

The growth is already visible. Tokenized assets expanded from just $85 million in 2020 to over $21 billion by April 2025 — a 245-fold increase. Non-stablecoin tokenized RWAs grew from roughly $5 billion in 2022 to about $24 billion by mid-2025, up 380% in just a few years.

BCG projects that the banking sector will account for over a third of all tokenized assets by the end of the decade, with this share surging to over 50% by 2033. Real estate, funds, and stablecoins are expected to lead the growth.

Tibor Merey, Managing Director at BCG, noted: "Tokenization is transforming financial assets into programmable and interoperable instruments, recorded on shared digital ledgers. This enables 24/7 transactions, fractional ownership, and automated compliance."

Robinhood's early mover advantage in tokenized equities could position it to capture significant share of this market — especially given its existing distribution to retail investors who already trust the platform with their traditional investments.

Regulatory Tailwinds and Headwinds​

The path forward isn't without obstacles. Tokenized securities exist in a regulatory gray zone in the United States, where the SEC has historically taken an enforcement-heavy approach to crypto assets.

Tenev has publicly urged lawmakers to pass the CLARITY Act, which would push the SEC to write clear rules for tokenized equities. Without regulatory clarity, the full potential of tokenized securities may remain limited to European and other international markets.

Currently, Robinhood's tokenized stock offerings are available to EU customers but not U.S. users. The company is expanding to over 400 million people across 30 EU and EEA countries, where MiCA regulations provide clearer frameworks for digital asset services.

However, the regulatory environment may be shifting. The SEC has seen leadership changes, and bipartisan crypto legislation is moving through Congress. Robinhood's bet appears to be that regulatory clarity will arrive before the Robinhood Chain's public launch — or that international adoption will generate sufficient momentum to force domestic progress.

What This Means for Blockchain Infrastructure​

Robinhood's L2 represents a paradigm shift for blockchain infrastructure. Previously, crypto projects hoped to onboard institutions and retail users onto existing chains. Now, institutions are building their own chains to bring crypto capabilities to existing user bases.

This has profound implications:

For Ethereum: Enterprise rollups validate Ethereum's position as the premier settlement layer for regulated assets. Every enterprise L2 increases demand for ETH as a security budget and settlement token, even if users never directly interact with mainnet.

For Arbitrum: Each Orbit deployment expands Arbitrum's ecosystem and demonstrates the viability of its technology stack. Robinhood's success would be a major endorsement of Arbitrum's enterprise readiness.

For DeFi: Tokenized stocks on EVM-compatible chains can eventually integrate with existing DeFi protocols. Imagine borrowing against your Apple stock position on Aave, or using Tesla shares as collateral for a stablecoin loan. The composability of blockchain assets could unlock entirely new financial products.

For Traditional Finance: Every major brokerage is now evaluating its blockchain strategy. Schwab, Fidelity, and Interactive Brokers will face pressure to offer similar capabilities or risk losing customers to platforms that do.

The Road Ahead​

Robinhood's Layer 2 blockchain is still on a private testnet with no public launch date confirmed. But the company's moves signal a clear direction: blockchain rails for traditional assets, starting with stocks and expanding to private equity, real estate, and beyond.

When Tenev says "tokenization will unlock 24/7 markets, and once people experience it, they'll never go back," he's not making a prediction — he's describing a strategy. Robinhood is building the infrastructure to make that future inevitable.

The question isn't whether tokenized securities will become mainstream, but who will control the infrastructure when they do. With 24 million users, regulatory relationships, and now its own blockchain, Robinhood is making a serious bid to be that platform.

Within five to ten years, the concept of market hours may seem as archaic as paper stock certificates. And when that day comes, Robinhood's bet on Ethereum Layer 2 will look less like a gamble and more like the obvious move that everyone else was too slow to make.

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For developers and institutions building on blockchain infrastructure, the Robinhood Chain's architecture choices offer valuable lessons in balancing decentralization with regulatory compliance. BlockEden.xyz provides enterprise-grade RPC services and infrastructure tools for teams building on Arbitrum and other EVM-compatible chains. Explore our API marketplace to see how we can support your RWA tokenization initiatives.

ZKsync just abandoned the crypto playbook. While every other Layer 2 chases DeFi degens and memecoin volume, Matter Labs is betting its future on something far more audacious: becoming the invisible infrastructure behind the world's largest banks. Deutsche Bank is building a blockchain. UBS is tokenizing gold. And at the center of this institutional gold rush sits Prividium—a privacy-first banking stack that could finally bridge the chasm between Wall Street and Ethereum.

The shift is not subtle. CEO Alex Gluchowski's 2026 roadmap reads less like a crypto manifesto and more like an enterprise sales pitch, complete with compliance frameworks, regulatory "super admin rights," and transaction privacy that satisfies the most paranoid bank compliance officer. For a project born from cypherpunk ideals, this is either a stunning betrayal or the smartest pivot in blockchain history.

What happens when you take Solana's fastest execution engine and plant it on Ethereum's security foundation? SOON Network answered that question with a number that makes every EVM rollup look antiquated: 80,000 transactions per second. That's 40x faster than any EVM-based Layer 2 and 240x faster than Ethereum mainnet. The Solana Virtual Machine isn't just running on Solana anymore—it's coming for Ethereum's rollup ecosystem.

SOON (Solana Optimistic Network) represents something genuinely novel in blockchain architecture: the first major production rollup bringing Solana's parallel execution capabilities to Ethereum. After raising $22 million through an NFT sale and launching its mainnet, SOON is proving that the SVM vs EVM debate might end with "why not both?"

The Architecture: Decoupled SVM Explained​

SOON's core innovation is what they call the "Decoupled SVM"—a reimagining of Solana's execution environment designed specifically for rollup deployments. Traditional approaches to bringing SVM to other chains involved forking the entire Solana validator, consensus mechanisms and all. SOON took a different path.

What Decoupled SVM Actually Does:

The team separated the Transaction Processing Unit (TPU) from Solana's consensus layer. This allows the TPU to be controlled directly by the rollup node for derivation purposes, without carrying the overhead of Solana's native consensus. Vote transactions—which are necessary for Solana's proof-of-stake but irrelevant for L2s—get eliminated entirely, reducing data availability costs.

The result is a modular architecture with three core components:

1. SOON Mainnet: A general-purpose SVM L2 that settles on Ethereum, serving as the flagship implementation
2. SOON Stack: An open-source rollup framework merging OP Stack with decoupled SVM, enabling SVM-based L2 deployment on any L1
3. InterSOON: A cross-chain messaging protocol for seamless interoperability between SOON and other blockchain networks

This isn't just theoretical. SOON's public mainnet launched with 20+ ecosystem projects deployed, including native bridges for Ethereum and cross-chain connectivity to Solana and TON.

Firedancer Integration: The Performance Breakthrough​

The 80,000 TPS figure isn't aspirational—it's tested. SOON achieved this milestone through early integration of Firedancer, Jump Trading's ground-up reimplementation of the Solana validator client.

Firedancer's Impact on SOON:

• Signature verification speeds increased 12x
• Account update throughput expanded from 15,000/second to 220,000/second
• Network bandwidth requirements reduced by 83%

According to SOON founder Joanna Zeng, "even with like the basic hardware, we were able to test out to like 80K TPS, which is already about 40 times any EVM L2 out there."

The timing matters. SOON implemented Firedancer ahead of its widespread deployment on Solana mainnet, positioning itself as an early adopter of the most significant performance upgrade in Solana's history. Once Firedancer stabilizes fully, SOON plans to integrate it across all SOON Stack deployments.

What This Means for Ethereum:

With Firedancer's release, SOON projects a 600,000 TPS capability for Ethereum—300x the throughput of current EVM rollups. The parallel execution model that makes Solana fast (Sealevel runtime) now operates within Ethereum's security perimeter.

The SVM Rollup Landscape: SOON vs Eclipse vs Neon​

SOON isn't alone in the SVM-on-Ethereum space. Understanding the competitive landscape reveals different approaches to the same fundamental insight: SVM's parallel execution outperforms EVM's sequential model.

Aspect	SOON	Eclipse	Neon
Architecture	OP Stack + Decoupled SVM	SVM + Celestia DA + RISC Zero proofs	EVM-to-SVM translation layer
Focus	Multi-L1 deployment via SOON Stack	Ethereum L2 with Celestia DA	EVM dApp compatibility on SVM chains
Performance	80,000 TPS (Firedancer)	~2,400 TPS	Native Solana speeds
Funding	$22M (NFT sale)	$65M	Production since 2023
Token Model	Fair launch, no VC	$ES as gas token	NEON token

Eclipse launched its public mainnet in November 2024 with $65 million in VC backing. It uses Ethereum for settlement, SVM for execution, Celestia for data availability, and RISC Zero for fraud proofs. Transaction costs run as low as $0.0002.

Neon EVM took a different approach—rather than building an L2, Neon provides an EVM compatibility layer for SVM chains. Eclipse integrated Neon Stack to enable EVM dApps (written in Solidity or Vyper) to run on SVM infrastructure, breaking the EVM-SVM compatibility barrier.

SOON's Differentiation:

SOON emphasizes its fair launch token model (no VC involvement in initial distribution) and its SOON Stack as a framework for deploying SVM L2s on any L1—not just Ethereum. This positions SOON as infrastructure for the broader multi-chain future rather than a single Ethereum L2 play.

Tokenomics and Community Distribution​

SOON's token distribution reflects its community-first positioning:

Allocation	Percentage	Amount
Community	51%	510 million
Ecosystem	25%	250 million
Team/Co-builders	10%	100 million
Foundation/Treasury	6%	60 million

The total supply is 1 billion $SOON tokens. Community allocation includes airdrops for early adopters and liquidity provision for exchanges. The ecosystem portion funds grants and performance-based incentives for builders.

$SOON serves multiple functions within the ecosystem:

• Governance: Token holders vote on protocol upgrades, treasury management, and ecosystem development
• Utility: Powers all activities across SOON ecosystem dApps
• Incentives: Rewards builders and ecosystem contributors

The absence of VC token allocations at launch distinguishes SOON from most L2 projects, though the long-term implications of this model remain to be seen.

The Multi-Chain Strategy: Beyond Ethereum​

SOON's ambition extends beyond being "another Ethereum L2." The SOON Stack is designed to deploy SVM-based rollups on any supporting Layer 1, creating what the team calls the "Super Adoption Stack."

Current Deployments:

• SOON ETH Mainnet (Ethereum)
• svmBNB Mainnet (BNB Chain)
• InterSOON bridges to Solana and TON

Future Roadmap:

SOON has announced plans to incorporate Zero Knowledge Proofs to address the optimistic rollup challenge period. Currently, like other optimistic rollups, SOON requires a one-week challenge period for fraud proofs. ZK proofs would enable instant verification, eliminating this delay.

This multi-chain approach bets on a future where SVM execution becomes a commodity deployable anywhere—Ethereum, BNB Chain, or chains that don't exist yet.

Why SVM on Ethereum Makes Sense​

The fundamental case for SVM rollups rests on a simple observation: Solana's parallel execution model (Sealevel) processes transactions simultaneously across multiple cores, while EVM processes them sequentially. When you're running thousands of independent transactions, parallelism wins.

The Numbers:

• Daily Solana transactions: 200 million (2024), projected 4+ billion by 2026
• Current EVM L2 throughput: ~2,000 TPS maximum
• SOON with Firedancer: 80,000 TPS tested

But Ethereum offers something Solana doesn't: established security guarantees and the largest DeFi ecosystem. SOON isn't trying to replace either chain—it's combining Ethereum's security with Solana's execution.

For DeFi applications requiring high transaction throughput (perpetuals, options, high-frequency trading), the performance gap matters. A DEX on SOON can process 40x more trades than the same DEX on an EVM rollup, at similar or lower costs.

What Could Go Wrong​

Complexity Risk: The Decoupled SVM introduces new attack surfaces. Separating consensus from execution requires careful security engineering. Any bugs in the decoupling layer could have consequences different from standard Solana or Ethereum vulnerabilities.

Ecosystem Fragmentation: Developers must choose between EVM tooling (more mature, larger community) and SVM tooling (faster execution, smaller ecosystem). SOON bets that performance advantages will drive migration, but developer inertia is real.

Firedancer Dependencies: SOON's roadmap depends on Firedancer stability. While early integration provides competitive advantage, it also means bearing the risk of a new, less battle-tested client implementation.

Competition: Eclipse has more funding and VC backing. Other SVM projects (Sonic SVM, various Solana L2s) compete for the same developer attention. The SVM rollup space may face similar consolidation pressures as EVM L2s.

The Bigger Picture: Execution Layer Convergence​

SOON represents a broader trend in blockchain architecture: execution environments becoming portable across settlement layers. The EVM dominated smart contract development for years, but SVM's parallel execution demonstrates that alternative architectures offer genuine performance advantages.

If SVM rollups prove successful on Ethereum, the implications extend beyond any single project:

1. Developers gain options: Choose EVM for compatibility or SVM for performance, deploying on the same Ethereum security layer
2. Performance ceiling rises: 80,000 TPS today, potentially 600,000+ TPS with full Firedancer integration
3. Chain wars become less relevant: When execution engines are portable, the question shifts from "which chain?" to "which execution environment for this use case?"

SOON isn't just building a faster L2—it's betting that blockchain's future involves mixing and matching execution environments with settlement layers. Ethereum security with Solana speed isn't a contradiction anymore; it's an architecture.

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BlockEden.xyz provides high-performance RPC infrastructure for developers building on Solana, Ethereum, and emerging L2 ecosystems. As SVM rollups expand blockchain's execution capabilities, reliable node infrastructure becomes critical for applications requiring consistent performance. Explore our API marketplace for multi-chain development.

The Ethereum Layer 2 ecosystem has reached an inflection point. After years of explosive growth that saw dozens of rollups launch with billion-dollar valuations and aggressive airdrop campaigns, 2026 is shaping up to be the year of reckoning. The data tells an uncomfortable story: three networks—Base, Arbitrum, and Optimism—now process nearly 90% of all L2 transactions, while the long tail of competing rollups faces an existential crisis.

This isn't speculation. It's the logical conclusion of market dynamics that have been building throughout 2025, accelerating into a consolidation phase that will reshape Ethereum's scaling layer. For developers, investors, and users, understanding this shift is essential for navigating the year ahead.

The Numbers That Matter​

Layer 2 Total Value Locked has grown from under $4 billion in 2023 to approximately $47 billion by late 2025—a remarkable achievement for Ethereum's scaling thesis. But that growth has been remarkably concentrated.

Base alone now accounts for over 60% of all L2 transactions and approximately 46.6% of L2 DeFi TVL. Arbitrum holds roughly 31% of DeFi TVL with $16-19 billion in total value secured. Optimism, through its OP Stack ecosystem (which powers Base), influences approximately 62% of all Layer 2 transactions.

Together, these three ecosystems command over 80% of meaningful L2 activity. The remaining 20% is fragmented across dozens of chains, many of which have seen usage collapse after their initial airdrop farming cycles concluded.

21Shares, the crypto asset manager, projects a "leaner, more resilient" set of networks will define Ethereum's scaling layer by end of 2026. Translation: many existing L2s will become zombie chains—technically operational but economically irrelevant.

The Zombie Chain Phenomenon​

The pattern has become predictable. A new L2 launches with venture backing, promising superior technology or unique value propositions. An incentive program attracts mercenary capital chasing points and potential airdrops. Usage metrics spike dramatically. A Token Generation Event (TGE) occurs. Within weeks, liquidity and users migrate elsewhere, leaving behind a ghost town.

This isn't a failure of technology—most of these rollups work exactly as designed. It's a failure of distribution and sustainable economics. Building a rollup has become commoditized; acquiring and retaining users has not.

The data shows that 2025 was "the year the Layer 2 narrative bifurcated." Most new launches became ghost towns shortly after airdrop farming cycles, while only a handful of L2s escaped this phenomenon. The mercenary nature of on-chain participation means that absent genuine product differentiation or locked-in user bases, capital flows to wherever the next incentive opportunity exists.

Base: The Distribution Moat​

Base's dominance illustrates why distribution trumps technology in the current L2 landscape. Coinbase's L2 finished 2025 as the top rollup by revenue, earning $82.6 million while maintaining $4.3 billion in DeFi TVL. Applications built on Base generated an additional $369.9 million in revenue.

The numbers get more impressive when you examine sequencer economics. Base averages $185,291 in daily sequencer revenue, with priority fees alone contributing $156,138 daily—approximately 86% of total revenue. Transactions in the top block positions contribute 30-45% of daily revenue, highlighting the value of ordering rights even in a post-Dencun environment.

What makes Base different isn't superior rollup technology—it runs on the same OP Stack that powers Optimism and dozens of other chains. The difference is Coinbase's 9.3 million monthly active trading users, providing direct distribution to an already-onboarded user base. This is the moat that technology alone cannot replicate.

Base was the only L2 that turned a profit in 2025, earning approximately $55 million after accounting for L1 data costs and revenue sharing with the Optimism Collective. For comparison, most other L2s operated at losses while hoping token appreciation would compensate for negative unit economics.

Arbitrum: The DeFi Fortress​

While Base dominates transaction volume and retail activity, Arbitrum maintains its position as the institutional and DeFi heavyweight. With $16-19 billion in total value secured—representing roughly 41% of the entire L2 market—Arbitrum hosts the deepest liquidity pools and most sophisticated DeFi protocols.

Arbitrum's strength lies in its maturity and composability. Major protocols like GMX, Aave, and Uniswap have established significant deployments, creating network effects that attract additional projects. The chain's governance through the ARB token, while imperfect, has created a stakeholder ecosystem invested in long-term success.

Recent data shows $40.52 million in net inflows to Arbitrum, suggesting continued institutional confidence despite the competitive pressure from Base. However, Arbitrum's TVL has remained largely flat year-over-year, edging down slightly from approximately $2.9 billion to $2.8 billion in DeFi TVL—a sign that growth is increasingly zero-sum against Base.

The Superchain Strategy​

Optimism's approach to L2 competition has been strategic rather than direct. Instead of fighting Base for market share, Optimism positioned itself as infrastructure through the OP Stack and Superchain model.

The numbers validate this bet: the OP Stack now powers roughly 62% of all Layer 2 transactions. Within the Superchain ecosystem, there are currently 30 Layer 2s, including enterprise deployments like Kraken's Ink, Sony's Soneium, Mode, and World (formerly Worldcoin).

Base contributes 2.5% of its sequencer revenue or 15% of net profits to the Optimism Collective in exchange for 118 million OP tokens vesting over several years. This creates a symbiotic relationship where Base's success directly benefits Optimism's treasury and governance token.

The Superchain model represents the emergence of the "enterprise rollup"—a phenomenon where major institutions launch or adopt L2 infrastructure rather than building on existing public chains. Kraken, Uniswap (Unichain), Sony, and Robinhood have all moved in this direction, betting on branded execution environments while sharing security and interoperability through the OP Stack.

The Coming Consolidation​

What does this mean for the dozens of L2s outside the top three? Several outcomes are likely:

Acquisition or Merger: Well-funded L2s with unique technology or niche user bases may be absorbed into larger ecosystems. Expect Superchain and Arbitrum Orbit to compete for promising projects that can't sustain independent operations.

Pivot to App-Specific Chains: Some general-purpose L2s may narrow their focus to specific verticals (gaming, DeFi, social) where they can maintain defensible positions. This follows the broader trend of application-specific sequencing.

Graceful Deprecation: The most likely outcome for many chains is a slow fade—reduced development activity, migrated liquidity, and eventual effective abandonment while technically remaining operational.

ZK Breakthrough: ZK rollups, currently holding approximately $1.3 billion in TVL across a dozen active projects, represent a wildcard. If ZK proving costs continue declining and the technology matures, ZK-based L2s could capture share from optimistic rollups—though they face the same distribution challenges.

The Decentralization Question​

A uncomfortable truth underlies this consolidation: most L2s remain far more centralized than they appear. Despite progress in decentralization efforts, many networks continue to rely on trusted operators, upgrade keys, and closed infrastructure.

As one analyst noted, "2025 has shown that decentralization is still treated as a long-term goal rather than an immediate priority." This creates systemic risk if dominant L2s face regulatory pressure or operational failures. The concentration of 80%+ of activity in three ecosystems, all of which have meaningful centralization vectors, should concern anyone building mission-critical applications.

What Comes Next​

For developers, the implications are clear: build where the users are. Unless you have a compelling reason to deploy on a niche L2, Base, Arbitrum, and Optimism offer the best combination of liquidity, tooling, and user access. The days of deploying everywhere and hoping for the best are over.

For investors, L2 token valuations need recalibration. Cash flow will increasingly matter—networks that can demonstrate sustainable sequencer revenue and profitable operations will command premiums over those relying on token inflation and speculation. Revenue-sharing models, sequencer profit distribution, and yield tied to actual network usage will define which L2 tokens have long-term value.

For the industry, the L2 shakeout represents maturation, not failure. Ethereum's scaling thesis was never about having hundreds of competing rollups—it was about achieving scale while preserving decentralization and security guarantees. A consolidated landscape with 5-10 meaningful L2s, each processing millions of transactions daily at sub-cent fees, accomplishes that goal more effectively than a fragmented ecosystem of zombie chains.

The great Layer 2 shakeout of 2026 will be uncomfortable for projects caught on the wrong side of the consolidation curve. But for Ethereum as a platform, the emergence of clear winners may be exactly what's needed to move past infrastructure debates and toward the application layer innovation that actually matters.

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Blast's total value locked collapsed 97%—from $2.2 billion to $67 million. Kinto shut down entirely. Loopring closed its wallet service. And that's just the beginning. As 2026 unfolds, Ethereum's Layer 2 ecosystem is witnessing a mass extinction event that's reshaping the entire blockchain scaling landscape.

While more than 50 Layer 2 networks compete for attention, 21Shares' latest State of Crypto report delivers a sobering verdict: most won't survive past 2026. Three networks—Base, Arbitrum, and Optimism—now process nearly 90% of all L2 transactions, with Base alone commanding over 60% market share. The rest? They're becoming "zombie chains," ghost networks with usage down 61% since mid-2025, drained of liquidity, users, and any meaningful future.

The Three Horsemen of L2 Dominance​

The consolidation numbers tell a stark story. Base captured 62% of total L2 revenue year-to-date in 2025, generating $75.4 million of the ecosystem's $120.7 million. Arbitrum and Optimism follow, but the gap is widening rather than closing.

What separates the winners from the walking dead?

Distribution advantage: Base's primary weapon is direct access to Coinbase's 9.3 million monthly active users—a built-in distribution channel that no other L2 can replicate. When Coinbase users applied for $866.3 million in loans through Morpho, 90% of that activity happened on Base. Morpho's TVL on Base exploded 1,906% year-to-date, from $48.2 million to $966.4 million.

Transaction volume: Base handled nearly 40 million transactions in the last 30 days. Compare that to Arbitrum's 6.21 million and Polygon's 29.3 million. Base boasts 15 million unique active wallets versus Arbitrum's 1.12 million and Polygon's 3.69 million.

Profitability: Here's the killer metric—Base was the only L2 that turned a profit in 2025, earning approximately $55 million. Every other rollup operated at a loss after Ethereum's Dencun upgrade slashed data fees by 90%, triggering aggressive fee wars that most networks couldn't win.

The Dencun Aftermath: When Lower Fees Became a Death Sentence​

Ethereum's Dencun upgrade was supposed to be a gift to Layer 2 networks. By reducing data posting costs by roughly 90%, it would make rollups cheaper to operate and more attractive to users. Instead, it triggered a race to the bottom that exposed the fundamental weakness of undifferentiated L2s.

When everyone can offer cheap transactions, nobody has pricing power. The result was a fee war that pushed most rollups into loss-making territory. Without a unique value proposition—whether that's a built-in user base like Base, a mature DeFi ecosystem like Arbitrum, or a network of enterprise chains like Optimism's Superchain—there's no sustainable path forward.

The economic reality is brutal: competitive pressure intensified to the point where only networks with massive scale or strategic backing can survive. That leaves dozens of L2s running on fumes, hoping for a turnaround that likely isn't coming.

Anatomy of a Zombie Chain: The Blast Case Study​

Blast's trajectory offers a masterclass in how quickly an L2 can go from hype to hospice. At its peak, Blast commanded $2.2 billion in TVL and 77,000 daily active users. Today? TVL sits at $55-67 million—a 97% collapse—with just 3,500 daily active users.

The warning signs were there for anyone watching:

Airdrop-driven growth: Like many L2s, Blast's initial traction came from points-fueled speculation rather than organic demand. Users piled in to farm the airdrop, then fled the moment tokens hit wallets.

Disappointing token launch: The BLAST token airdrop failed to retain users, triggering an immediate exodus to rivals like Base and Arbitrum with established ecosystems and deeper liquidity.

Developer abandonment: The official Blast account on X has been inactive since May 2025. The founder's page shows no posts in months. When core teams go silent, the community follows.

Protocol retreat: Even major DeFi protocols like Aave and Synthetix scaled back their Blast deployments, citing poor liquidity and limited returns. When blue-chip DeFi abandons your network, retail isn't far behind.

Blast isn't alone. Many emerging L2s have followed similar trajectories: heavy, incentive-driven activity ahead of a token generation event, a points-fueled surge in usage, then rapid post-TGE decline as liquidity and users migrate elsewhere.

The Rise of Enterprise Rollups​

While zombie chains wither, 2025 marked the rise of a new category: the enterprise rollup. Major institutions began launching or adopting L2 infrastructure, often standardizing on the OP Stack framework:

• Kraken's Ink: The exchange launched its own L2, recently announcing the Ink Foundation and plans for an INK token to power a liquidity protocol built with Aave.
• Uniswap's UniChain: The dominant DEX now has its own chain, capturing value that previously leaked to other networks.
• Sony's Soneium: Targeting gaming and media distribution, Sony's L2 represents traditional entertainment's blockchain ambitions.
• Robinhood's Arbitrum integration: The trading platform uses Arbitrum for quasi-L2 settlement rails for brokerage clients.

These networks bring something most indie L2s lack: captive user bases, brand recognition, and the resources to sustain operations through lean periods. The Optimism Superchain now comprises 34 OP Chains live on mainnet, with Base and OP Mainnet as the most active, followed by World, Soneium, Unichain, Ink, BOB, and Celo.

The consolidation around OP Stack isn't just technical preference—it's economic survival. Shared security, interoperability, and network effects make going alone increasingly untenable.

What Survives the Extinction?​

21Shares expects a "leaner, more resilient" set of networks to define Ethereum's scaling layer by end of 2026. The firm sees the landscape coalescing around three pillars:

1. Ethereum-aligned designs: Networks like Linea route value back to the main chain, aligning their success with Ethereum's ecosystem health rather than competing with it.

2. High-performance contenders: MegaETH and similar projects target near real-time execution, differentiating through speed rather than price. When everyone's cheap, being fast becomes the moat.

3. Exchange-backed networks: Base, BNB Chain, Mantle, and Ink leverage their parent exchanges' user bases and capital reserves to weather market downturns that would kill independent chains.

The DeFi TVL hierarchy reinforces this prediction. Base (46.58%) and Arbitrum (30.86%) dominate Layer 2 DeFi, with total value secured showing a similar concentration—together representing over 75% of the category.

The 2026 Roadmaps: Survivors Building for the Future​

The winning L2s aren't resting on their dominance. Their 2026 roadmaps reveal aggressive expansion plans:

Base: Coinbase's L2 is pivoting toward the creator economy via the "Base App"—a super app integrating messaging, wallet, and mini-apps. The potential total market size approaches $500 billion. Base is also exploring token issuance, though specifics on allocation, utility, and launch date remain unannounced.

Arbitrum: The $215M Gaming Catalyst Program deploys capital through 2026 to fund game studios and infrastructure, targeting SDKs for Unity/Unreal Engine integration. First funded titles launch Q3 2026. The ArbOS Dia Upgrade (Q1 2026) enhances fee predictability and throughput, while Orbit Ecosystem Expansion enables custom chain deployments across industries.

Optimism: The foundation announced plans to dedicate 50% of incoming Superchain revenue to monthly OP token buybacks starting February 2026—a move that transforms OP from pure governance token to one directly aligned with ecosystem growth. The Interop Layer Launch in early 2026 enables cross-chain messaging and shared security across Superchain networks.

The Implications for Builders and Users​

If you're building on a smaller L2, the writing is on the wall. The 61% usage decline across weaker networks since June 2025 isn't a temporary setback—it's the new normal. Smart teams are already migrating to networks with sustainable economics and proven traction.

For users, the consolidation actually brings benefits:

• Deeper liquidity: Concentrated activity means better trading conditions, tighter spreads, and more efficient markets.
• Better tooling: Developer resources naturally flow to dominant platforms, meaning superior wallet support, analytics, and application ecosystems.
• Network effects: The more users and applications concentrate on winning L2s, the more valuable those networks become.

The tradeoff is reduced decentralization and increased dependence on a handful of players. Base's dominance, in particular, raises questions about whether the L2 ecosystem is simply recreating Web2's platform concentration under a blockchain wrapper.

The Bottom Line​

Ethereum's Layer 2 landscape is entering its final form—not the diverse, competitive ecosystem many hoped for, but a tight oligopoly where three networks control nearly everything that matters. The zombie chains will linger for years, running on minimal activity while their teams pivot to other projects or slowly wind down.

For the winners, 2026 represents an opportunity to cement dominance and expand into adjacent markets. For everyone else, the question isn't whether to compete with Base, Arbitrum, and Optimism—it's how to coexist in a world they dominate.

The L2 extinction event isn't coming. It's already here.

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What if blockchain transactions were as instant as pressing a button in a video game? That's the audacious promise of MegaETH, the Vitalik Buterin-backed Layer 2 that's launching its mainnet and token this January 2026. With claims of 100,000+ transactions per second and 10-millisecond block times—compared to Ethereum's 15 seconds and Base's 1.78 seconds—MegaETH isn't just iterating on existing L2 technology. It's attempting to redefine what "real-time" means for blockchain.

After raising $450 million in its public sale (from $1.39 billion in total bids) and securing backing from Ethereum's co-creator himself, MegaETH has become one of the most anticipated launches of 2026. But can it deliver on promises that sound more like science fiction than blockchain engineering?

What happens when the company behind a 1.4 billion-user payment network decides to build on Ethereum? The answer arrived in October 2025 when Ant Digital, the blockchain arm of Jack Ma's Ant Group, launched Jovay—a Layer-2 network designed to bring real-world assets on-chain at a scale the crypto industry has never seen.

This isn't another speculative L2 chasing retail traders. Jovay represents something far more significant: a $2 trillion fintech giant placing a strategic bet that public blockchain infrastructure—specifically Ethereum—will become the settlement layer for institutional finance.

The Technical Architecture: Built for Institutional Scale​

Jovay's specifications read like a wishlist for institutional adoption. During testnet trials, the network achieved 15,700–22,000 transactions per second, with a stated goal of reaching 100,000 TPS through node clustering and horizontal expansion. For context, Ethereum's mainnet processes roughly 15 TPS. Even Solana, celebrated for speed, averages around 4,000 TPS in real-world conditions.

The network operates as a zkRollup, inheriting Ethereum's security guarantees while achieving the throughput necessary for high-frequency financial operations. A single node, running on standard enterprise hardware (32-core CPU, 64GB RAM), can sustain 30,000 TPS for ERC-20 transfers with approximately 160ms end-to-end latency.

But raw performance tells only part of the story. Jovay's architecture centers on a five-stage pipeline specifically designed for asset tokenization: registration, structuring, tokenization, issuance, and trading. This structured approach reflects the compliance requirements of institutional finance—assets must be properly documented, legally structured, and regulatory-approved before they can be traded.

Critically, Jovay launched without a native token. This deliberate choice signals that Ant Digital is building infrastructure, not generating speculative assets. The network makes money through transaction fees and enterprise partnerships, not token inflation.

Chainlink Integration: The Oracle Infrastructure for RWA Markets​

In October 2025, Chainlink announced that its Cross-Chain Interoperability Protocol (CCIP) would serve as Jovay's canonical cross-chain infrastructure, with Data Streams providing real-time market data for tokenized assets.

This integration solves a fundamental problem in RWA tokenization: connecting on-chain assets to off-chain reality. A tokenized bond is only valuable if investors can verify coupon payments. A tokenized solar farm is only investable if performance data can be trusted. Chainlink's oracle network provides the trusted data feeds that make these verification systems possible.

The partnership also addresses cross-chain liquidity. CCIP enables secure asset transfers between Jovay and other blockchain networks, allowing institutions to move tokenized assets without relying on centralized bridges—the source of billions in hacks over the past few years.

Why a Chinese Fintech Giant Chose Ethereum​

For years, major corporations favored permissioned blockchains like Hyperledger for enterprise applications. The logic was simple: private networks offered control, predictability, and freedom from the volatility associated with public chains.

That calculus is changing. By building Jovay on Ethereum rather than a proprietary network, Ant Digital validates public blockchain infrastructure as a foundation for institutional finance. The reasons are compelling:

Network effects and composability: Ethereum hosts the largest ecosystem of DeFi protocols, stablecoins, and developer tools. Building on Ethereum means Jovay assets can interact with existing infrastructure—lending protocols, exchanges, and cross-chain bridges—without requiring custom integrations.

Credible neutrality: Public blockchains offer transparency that private networks cannot match. Every transaction on Jovay can be verified on Ethereum's mainnet, providing audit trails that satisfy both regulators and institutional compliance teams.

Settlement finality: Ethereum's security model, backed by approximately $100 billion in staked ETH, provides settlement guarantees that private networks cannot replicate. For institutions moving millions in assets, this security matters.

The decision is particularly notable given China's regulatory environment. While mainland China prohibits cryptocurrency trading and mining, Ant Digital has strategically positioned Jovay's global headquarters in Hong Kong and established a presence in Dubai—jurisdictions with forward-thinking regulatory frameworks.

The Hong Kong Regulatory Gateway​

Hong Kong's regulatory evolution has created a unique opportunity for Chinese tech giants to participate in crypto markets while maintaining mainland compliance.

In August 2025, Hong Kong enacted its Stablecoin Ordinance, establishing comprehensive requirements for stablecoin issuers including stringent KYC/AML standards. Ant Digital has engaged in multiple rounds of discussions with Hong Kong regulators and completed pioneering trials in the government-backed stablecoin sandbox (Project Ensemble).

The company designated Hong Kong as its international headquarters in early 2025, a strategic move that allows Ant Group to build crypto infrastructure for overseas markets while its mainland operations remain separate. This "one country, two systems" approach has become the template for Chinese companies seeking crypto exposure without violating mainland regulations.

Through partnerships with regulated entities like OSL, a licensed digital asset infrastructure provider in Hong Kong, Jovay is positioning itself as a "regulated RWA tokenization layer" for institutional investors—compliant by design rather than retrofit.

$8.4 Billion in Tokenized Energy Assets​

Ant Digital hasn't just built infrastructure—it's already using it. Through its AntChain platform, the company has linked $8.4 billion in Chinese energy assets to blockchain systems, tracking over 15 million renewable energy devices including solar panels, EV charging stations, and battery infrastructure.

This existing asset base provides immediate utility for Jovay. Green finance tokenization—representing ownership stakes in renewable energy projects—has emerged as one of the most compelling RWA use cases. These assets generate predictable cash flows (energy production), have established valuation methodologies, and align with growing ESG mandates from institutional investors.

The company has already raised 300 million yuan ($42 million) for three clean energy projects through tokenized asset issuances, demonstrating market demand for on-chain renewable energy investments.

The Competitive Landscape: Jovay vs. Other Institutional L2s​

Jovay enters a market with established institutional blockchain players:

Polygon has secured partnerships with Starbucks, Nike, and Reddit, but remains primarily focused on consumer applications rather than financial infrastructure.

Base (Coinbase's L2) has attracted significant DeFi activity but is US-focused and doesn't specifically target RWA tokenization.

Fogo, the "institutional Solana," targets similar high-throughput financial applications but lacks Ant Group's existing institutional relationships and asset base.

Canton Network (JPMorgan's blockchain) operates as a permissioned network for traditional finance, sacrificing public chain composability for institutional control.

Jovay's differentiation lies in the combination of public chain accessibility, institutional-grade compliance, and immediate connection to Ant Group's 1.4 billion-user ecosystem. No other blockchain network can claim comparable distribution infrastructure.

Market Timing: The $30 Trillion Opportunity​

Standard Chartered projects the tokenized RWA market will expand from $24 billion in mid-2025 to $30 trillion by 2034—a 1,250x increase. This projection reflects growing institutional conviction that blockchain settlement will eventually replace traditional financial infrastructure for many asset classes.

The catalyst for this transition is efficiency. Tokenized securities can settle in minutes rather than days, operate 24/7 rather than during market hours, and reduce intermediary costs by 60-80% according to various industry estimates. For institutions managing trillions in assets, even marginal efficiency gains translate to billions in savings.

BlackRock's BUIDL fund, Ondo Finance's tokenized treasuries, and Franklin Templeton's on-chain money market funds have demonstrated that major institutions are willing to embrace tokenized assets when the infrastructure meets their requirements.

Jovay's timing positions it to capture institutional capital as the RWA tokenization trend accelerates.

Risks and Open Questions​

Despite the compelling vision, significant uncertainties remain:

Regulatory risk: While Ant Digital has positioned strategically, Beijing reportedly instructed the company to pause stablecoin issuance plans in October 2025 due to concerns about capital flight. The company operates in regulatory gray areas that could shift unexpectedly.

Adoption timeline: Enterprise blockchain initiatives have historically taken years to achieve meaningful adoption. Jovay's success depends on convincing traditional financial institutions to migrate existing operations to a new platform.

Competition from TradFi: JPMorgan, Goldman Sachs, and other major banks are building their own blockchain infrastructure. These institutions may prefer networks they control over public chains built by potential competitors.

Token issuance uncertainty: Jovay's decision to launch without a native token could change. If the network eventually issues tokens, early institutional adopters may face unexpected regulatory complications.

What This Means for Web3​

Ant Group's entry into Ethereum's Layer-2 ecosystem represents validation of the thesis that public blockchains will become settlement infrastructure for global finance. When a company processing over $1 trillion in annual transactions chooses to build on Ethereum rather than a private network, it signals confidence in the technology's institutional readiness.

For the broader crypto industry, Jovay demonstrates that the "institutional adoption" narrative is materializing—just not in the form many expected. Instead of institutions buying Bitcoin as a treasury asset, they're building on Ethereum as operational infrastructure.

The next two years will determine whether Jovay delivers on its ambitious vision or joins the long list of enterprise blockchain initiatives that promised revolution but delivered modest improvements. With 1.4 billion potential users, $8.4 billion in tokenized assets, and the backing of one of the world's largest fintech companies, Jovay has the foundation to succeed where others have failed.

The question isn't whether institutional-grade blockchain infrastructure will emerge—it's whether Ethereum's Layer-2 ecosystem, including projects like Jovay, will capture the opportunity or watch as traditional finance builds its own walled gardens.

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