The blockchain world is witnessing a remarkable homecoming as several prominent projects, from DeFi veterans to gaming giants and mobile payment networks, are converging back onto the Ethereum mainnet or deeply integrating with its Layer 2 ecosystem. This trend highlights a renewed confidence in Ethereum's scaling capabilities and its undeniable draw as a hub for high-value decentralized finance.
The Shifting Tides: Why Projects are "Coming Home"
For a while, it felt like everyone was branching out, exploring alternative Layer 1s (alt-L1s) or building standalone Layer 2s (L2s) far from the Ethereum mainnet. But what's interesting is that the tide seems to be turning. We're now seeing a significant recalibration, with many projects choosing to either integrate more deeply with Ethereum's L2s or even return to the mainnet itself. It's a powerful signal that the Ethereum L1 is truly reasserting its claim as the premier home for high-value DeFi applications. Just look at the numbers: recent data indicates that Ethereum's mainnet boasts seven times more Total Value Locked (TVL) than its closest competitor. Meanwhile, the robust L2 model is proving to be a game-changer, offering not just potential savings in the millions but also critical network effects for these once-independent blockchain ecosystems.
Celo's Smart Move: Big Savings, Bigger Potential
Take Celo, for instance. This mobile payments network, which had its own validator network humming along, made a pretty significant pivot earlier this year, quietly transitioning to become an Ethereum L2. This happened at a time when there was a lot of talk, sometimes even skepticism, about the "extractive" nature of L2 roadmaps. So, why the move? The answer is compelling: Celo is now saving a staggering $7 million annually in operating costs. Think about that for a second! That's a massive reduction, freeing up resources that can be poured back into development, user acquisition, or further innovation. Specifically, by becoming an L2, Celo slashed its security costs by an incredible 99.8%. Instead of footing the bill for around 110 validators, each earning roughly $59,000 per year, an L2 just pays nominal fees for settlement and data storage on the L1. This brought their yearly expenses down from approximately $6.9 million to a mere $13,000. That's not just smart; it's a financial masterstroke.
Ronin's Epic Quest: From Departure to Homecoming
Then there's Ronin. Remember when network congestion on Ethereum was pushing major projects away? Ronin, the alt-L1 behind the incredibly popular blockchain game Axie Infinity, was one of them. Back in 2021, Axie Infinity migrated off the mainnet, enabling it to scale up to an astounding 2.8 million daily users at its peak in 2022. It was hailed as a pioneer in scaling solutions for gaming. Fast forward to today, and Ronin has announced its intention to return to Ethereum as an L2 by early 2026.
Jeffrey "Jiho" Zirlin, co-founder of Sky Mavis, the company behind both Axie Infinity and Ronin, put it quite simply: "Ethereum has largely delivered on the scaling roadmap." This confidence is key. While Axie Infinity remains a top title, generating $1.4 billion in the first half of 2023, bringing the game back to the Ethereum mainnet isn't a feasible option. Why? Because gaming involves complex transactions that demand serious scalability, far beyond what the L1 can currently handle for high-frequency interactions. Ronin now supports over 100 games, attracting 350,000 daily and 800,000 monthly active addresses, with transaction activity even surpassing its Axie boom peak. Zirlin highlights a fascinating blend of "idealism versus pragmatism" that led to Ronin initially seeking a solution that "just worked," but now, as Ethereum has made practical strides, they're ready to meet in the middle. The plan is for Ronin to relaunch as an Optimistic rollup, incorporating a zkEVM, within the Superchain architecture. This will align perfectly with Ethereum's Fusaka upgrade, which promises an eightfold increase in blob capacity, directly addressing critical data availability and cost bottlenecks.
Synthetix's Bold Pivot: Reclaiming Mainnet Liquidity
It's not just newer projects; even OGs are making moves. Synthetix, a foundational DeFi project that actually led the charge onto Optimism in 2021, recently made waves by announcing it would shutter its L2 "franchises" and consolidate its efforts back on the Ethereum mainnet. Their goal? To tap into the immense, sticky liquidity that has largely remained anchored on the mainnet. They're gearing up to launch a Hyperliquid-style perpetual decentralized exchange (perp DEX), complete with an eye-catching trading competition designed to attract high-profile influencers.
This decision reflects a significant realization about where the deep pockets are. Synthetix founder Kain Warwick, who returned to lead the project earlier this year, openly admitted that "Synthetix lost its way" for various reasons, but ultimately, the limitations of L2s constrained its growth. While the initial leap to Optimism in 2021 was a necessity due to prohibitive gas fees (claiming weekly rewards could cost $100 on mainnet!), the project found that the liquidity on L2s tended to be "mercenary" and highly mobile, constantly chasing the next incentive. Crucially, the biggest players – the whales and large market makers – never fully committed their substantial capital to L2s. Why is this important? Ethereum L1 currently accounts for a staggering 60% of the entire TVL in crypto, whereas a leading L2 like Base holds just 3.5%. Many large participants, including Warwick himself, chose not to move more than a fraction of their assets to L2s, citing security concerns alongside the cost of bridging.
Ethereum's Comeback Story: What's Driving the Confidence?
This movement back to Ethereum isn't just a coincidence; it reflects a growing, tangible optimism that the scaling roadmap is actually working. Developers and projects can now confidently allocate resources to building on the L1 without the constant worry of it grinding to a halt under increased activity.
Technical Triumphs: L1 Upgrades and ZK Tech
A significant part of this renewed confidence stems from credible plans to scale the Ethereum L1 itself. This includes strategic gas limit increases and the integration of cutting-edge Zero-Knowledge (ZK) technology. Lead engineer Ben Celermajer of Synthetix notes that there's now "enough of a commitment and enough action that we've seen from the Foundation and developers to scale the L1."
What's more, the L1 has fundamentally improved over the last five years. The transition to Proof-of-Stake (PoS) and larger block sizes have collectively enhanced its capabilities. Average gas fees on the mainnet have plummeted by 99% from their peak, making transactions significantly more affordable for users. The L1 gas limit, which dictates the amount of computational work a block can handle, is expected to increase to 60 million gas units per block around the time of the December Fusaka upgrade. The long-term goal is to push this to around 100 million, which would mean a maximum throughput of 80 transactions per second (TPS), a substantial jump from the current 40 TPS.
The L2 Advantage: Security, Throughput, and Cost Savings
Beyond L1 improvements, the L2 ecosystem itself is set for massive growth. Projects leveraging L2s can expect up to an eightfold increase in data capacity in 2026. This means even cheaper security and significantly higher throughput, which is crucial for applications that demand frequent, low-cost interactions.
We've already touched on Celo's impressive savings, but the cost benefits extend to others too. Running an independent alt-L1 network is notoriously complex and expensive. Ronin, for instance, has paid out $35 million in staking rewards since 2023. By transitioning to an L2 and outsourcing its security to Ethereum, Ronin can now redirect those substantial funds. Imagine: instead of using validator rewards to incentivize security, those emissions can now be channeled toward supporting developers who drive revenue or rewarding high-value users, essentially reinvesting directly into the ecosystem's growth.
Not only that, but becoming an L2 comes with other, perhaps less tangible, but equally important benefits. It ensures that projects like Ronin can stay up-to-date with the latest Ethereum Improvement Proposals (EIPs) and fully benefit from the robust security of the Ethereum mainnet. There's also a significant community aspect. As Zirlin points out, being part of the Ethereum ecosystem fosters collaboration, opening doors to partnerships and dialogues with people who might not have engaged before. It’s like being welcomed back into a big, thriving family.
Navigating the Nuances: Not a Simple Story
Now, it’s not all one-way traffic, is it? We still see projects exploring alternative chains. For example, the fantasy sports NFT project Sorare saw a considerable volume uptick after moving to Solana recently. Plus, financial titans like Circle and Stripe have announced their own competing L1s, Arc and Tempo.
However, many Ethereum enthusiasts take comfort in one crucial detail: these stablecoin-focused L1s are, for the most part, EVM-compatible. Zirlin shares a compelling perspective on this, suggesting that these projects might eventually evolve into L2s themselves. He speculates that initially, like Ronin once did, they might desire the flexibility of an independent L1, but ultimately, they'll "come home to Ethereum." His bold prediction? "All EVM L1s are future L2s." This idea suggests a long-term gravitational pull towards Ethereum, positioning it as the ultimate settlement layer for a vast, interconnected ecosystem.
Synthetix’s journey perfectly encapsulates this nuanced approach. While consolidating on the mainnet for deep liquidity, they're also making pragmatic choices for performance. Running a high-frequency, centralized exchange (CEX)-style trading platform directly on a genuinely decentralized network presents a challenge due to the inherent latency of global consensus. To tackle this, Synthetix plans to run an off-chain matching engine capable of a staggering 100,000 TPS. This means it will operate closer to a "Trust Me Bro" model than fully trustless for order matching, a necessary compromise, as Celermajer explains, given current market realities. He believes that four years ago, such a trade-off might not have been accepted by "decentralization maxis," but today's market is more willing to embrace these pragmatic solutions.
Synthetix's Next Chapter: Scaling on Mainnet (with a Twist)
Despite the off-chain component for speed, Synthetix isn't abandoning decentralization. Founder Kain Warwick envisions a transition to an "Optimistic order book" model. This would essentially transform the application into something akin to its own rollup, processing transactions off-chain and then posting the state to data "blobs" on the mainnet, much like an Optimistic rollup. Other potential avenues involve leveraging Trusted Execution Environments (TEEs) or even adopting ZK-proofs, similar to how Lighter uses them, to cryptographically verify the correctness of off-chain transactions. While still speculative, these ideas hint at a future where even individual applications on the mainnet could effectively scale themselves in innovative ways.
And what about Aave, the lending and borrowing giant? They're taking a more measured path. While they’re proposing to shutter about half of their under-performing instances spread across various L2s and chains like Avalanche, BNB Chain, Fantom, and Harmony—with 86% of their revenue still generated on Ethereum L1—they aren't going "all-in" on L1 either. Aave has also announced new integrations with OKX's X Layer L2 and Crypto.com’s Cronos Chain L2, demonstrating a pragmatic strategy of going "where the money and users are," as founder Stani Kulechov stated.
FAQ
Q1: What is driving projects like Celo, Ronin, and Synthetix back to Ethereum? A1: Projects are returning due to renewed confidence in Ethereum's scaling roadmap (L1 gas limit increases, ZK tech), significant cost savings offered by L2s, access to deep mainnet liquidity, enhanced security, and the network effects of being part of the broader Ethereum ecosystem.
Q2: What specific benefits do L2s offer to projects returning to Ethereum? A2: L2s offer substantial cost reductions (like Celo's 99.8% security cost cut), higher transaction throughput, increased data capacity (expected 8x boost by 2026), and the ability to redirect funds (e.g., staking rewards) towards ecosystem development and user incentives rather than network security.
Q3: Is the trend of projects moving back to Ethereum universal, or are there exceptions? A3: While there's a strong trend of consolidation around Ethereum, it's not entirely one-sided. Some projects, like Sorare, have moved to other L1s such as Solana, and new L1s from Circle and Stripe are emerging. However, many of these are EVM-compatible, leading some to predict they will eventually become L2s within the Ethereum orbit.
Conclusion
It's clear that we're seeing a significant shift in the blockchain landscape. The narrative of projects constantly fragmenting across disparate chains seems to be giving way to a powerful gravitational pull back towards Ethereum. With its evolving scaling roadmap, including both L1 enhancements and the burgeoning L2 ecosystem, Ethereum is proving to be an irresistible magnet for innovation and capital. From the massive cost savings realized by Celo, to Ronin's strategic homecoming for gaming scalability, and Synthetix's bold pivot to reclaim mainnet liquidity, the message is loud and clear: Ethereum is reasserting its dominance, offering a robust, secure, and increasingly scalable foundation for the future of decentralized finance and beyond. It's an exciting time to watch these ecosystems mature and integrate, building a more interconnected and efficient blockchain future.
