Remember when it felt like Layer-2s—Arbitrum, Base, and others—were the inevitable future? Through 2024 and early 2025, users and liquidity rushed there for cheaper fees, and it looked like Ethereum L1 was being slowly bypassed.
Then 2025 told a different story.
According to 2025 data, Ethereum became the top destination for net capital inflows, pulling in $4.2 billion. This wasn’t gradual growth—it was a clear migration of high-value liquidity back from other networks to the main chain.
The contrast is telling. The largest net outflow came from Arbitrum, signaling that DeFi whales and major protocols were repositioning. Yes, L2s still process over 93% of all transactions—that remains their strength. But when you look at where the money sits, the picture flips: 86.5% of the ecosystem’s total economic value is now concentrated on Ethereum L1.
So why did capital move back?
First: security regained priority.
After events like the October 10, 2025 liquidation, risk tolerance dropped fast. More complex and younger L2 constructions suddenly felt fragile. When uncertainty rose, capital flowed toward the most battle-tested and secure environment—Ethereum mainnet.
Second: fees fell while liquidity deepened.
Ethereum gas costs returned to historically low levels, making L1 viable again for large transactions. For big players, once fees stopped being painful, there was little reason to accept additional layers of complexity.
Third: Ethereum remains the standard settlement hub.
The most important bridges anchor to Ethereum. The deepest stablecoin liquidity lives in ERC-20 form. When funds need to move to exchanges, major protocols, or the most liquid venues, they naturally route back to L1. Ethereum functions as the central settlement layer for the entire crypto ecosystem.
Interestingly, Ethereum wasn’t the only winner. Hyperliquid, a derivatives-focused L1, ranked second with $2 billion in net inflows. That reinforces the broader pattern: capital isn’t loyal to a chain’s label—it follows activity, depth, and liquidity.
So what’s the takeaway?
2025 showed that Ethereum isn’t locked in a zero-sum L1 vs. L2 battle. Instead, the ecosystem behaves like a single layered system. L2s have become efficient zones for frequent, low-cost actions. Ethereum L1 has cemented itself as the capital—the place where core value is stored, large trades settle, and maximum security is expected.
The open question remains:
Is this concentration of liquidity on Ethereum L1 a lasting structural shift, or just a risk-off phase? When confidence returns in 2026, will capital once again chase yield across L2s and L3s?
