L2 Token Prices Plummet as Ethereum Scaling Grows

Ethereum's Layer 2 (L2) tokens have seen significant declines over the past month, with MEGA leading the downturn at -34.8%. This drop is puzzling given the growth of the scaling ecosystem and increasing transactions on Ethereum.

Nearly all major L2 governance tokens took a hit, even as TVL held steady and institutions continued to build on Ethereum's scaling technology. Investors are growing cautious about L2 token valuations due to this discrepancy.

Vitalik Buterin, co-founder of Ethereum, questioned the original Layer 2 roadmap earlier in the year, suggesting that L1 fees have come down and gas limits have increased. He advised L2 teams to focus on specialized niches rather than just scaling.