Back to Ethereum: How Synthetix, Ronin and Celo saw the lig

Ethereum’s core blockchain (L1) is seeing a resurgence as a hub for high-value decentralized finance (DeFi) projects. While some established protocols are reaffirming their commitment to L1, other networks are strategically transitioning to Layer 2 (L2) solutions, seeking efficiency and integration within the Ethereum ecosystem.

Simultaneously, a notable trend shows certain L1s converting into L2s, while some existing L2 projects are opting to return to the Ethereum mainnet. This dynamic landscape highlights the evolving strategies within the blockchain space.

DeFi’s Shifting Tides: High-Value Projects Re-Embrace Ethereum L1, Others Pivot to L2

Ethereum’s mainnet maintains a significant lead in Total Value Locked (TVL), demonstrating its continued appeal for substantial DeFi applications. This dominance underscores its foundational role in the decentralized economy.

The L2 model, offering considerable cost savings and network effects, presents an attractive path for projects seeking to integrate with Ethereum. This is particularly true for alt-L1s looking to leverage Ethereum’s robust infrastructure and expansive community.

Strategic Transitions to Layer 2

Several projects have made recent moves to embrace L2 architecture:

• Celo’s Cost-Saving Pivot: In a significant shift, the mobile payments network Celo ceased operations of its validator network earlier this year to re-establish itself as an L2. This strategic change is projected to generate substantial annual savings in operating costs.
• Ronin’s Return to Ethereum: The blockchain gaming platform Ronin announced its intention to rejoin the Ethereum ecosystem by early 2026. This move comes years after network congestion initially led its popular game, Axie Infinity, to migrate off the mainnet. Sky Mavis co-founder Jeffrey “Jiho” Zirlin noted that Ethereum’s scaling progress played a role in this decision.

This evolving landscape reflects a continuous calibration of strategies as projects seek optimal performance, cost efficiency, and integration within the broader blockchain ecosystem.