ETH Price Drops Amid Layer Two Network Growth Concerns
Ethereum's price has dropped by 3.55% to $2,370 due to increased selling pressure across the broader crypto market, fueled by concerns about a potential US Federal Reserve interest rate hike.
The decline in Ethereum's price does not mirror the growth of Robinhood Chain, which runs on the Ethereum layer two network Arbitrum.
An ARK Invest analyst claims that layer two networks are not adding value to Ethereum, as they generate revenue at the expense of Ethereum itself. According to Lorenzo Valente, Ethereum gets less than 1% of the revenue generated by Robinhood Chain, despite being the underlying platform.
The number of transactions and DEX volumes on Robinhood Chain has surged, with daily withdrawals averaging 25,178 ETH in August. This growth coincides with rising inflows to Ethereum ETFs, which have recorded 12 consecutive days of inflows as of September 1.