Companies Flocking to Layer 2 Networks May Be Overextending Themselves

Companies Flock to Layer 2 Networks, But Do They Really Need Their Own? In a trend that has been gaining momentum over the past year, numerous companies have announced plans to launch their own Ethereum layer 2 networks. However, according to Paul Brody, Global Blockchain Leader at EY, most of these efforts are likely unnecessary. As of September 2025, there were already over 150 layer 2 networks in existence, with several prominent companies such as Robinhood announcing their own plans to join the fray. This proliferation has led some to question whether companies truly need their own layer 2 networks or if they can simply utilize existing ones. Brody argues that only companies that can aggregate significant transaction volume into the network and whose customers cannot make direct connections to Ethereum would benefit from creating their own layer 2. "Most companies don't meet these criteria," he said in an interview with CoinDesk. "They're just trying to jump on a bandwagon, but it's not necessarily the right decision for them." The attractions of launching an Ethereum layer 2 network are significant, particularly when compared to launching one's own layer 1 blockchain. Layer 1 networks must compete with established players like Ethereum and Solana in a crowded market, while layer 2 networks can leverage the existing infrastructure and user base of their parent network. However, Brody notes that creating a customized layer 2 network requires significant resources and expertise, which may not be justified for companies that do not meet the criteria. "It's a costly endeavor," he said. "Companies should carefully consider whether it makes sense for them to invest in building their own layer 2." Background research suggests that many companies are drawn to the idea of launching their own layer 2 networks due to concerns about scalability, security, and cost-effectiveness. However, existing layer 2 networks such as Optimism and Polygon have demonstrated impressive capabilities in these areas. Additional perspectives from industry experts suggest that while creating a customized layer 2 network may not be necessary for most companies, it can still provide benefits such as increased control over the user experience and improved data management. As of now, several prominent companies are moving forward with their plans to launch their own layer 2 networks. However, Brody's warnings serve as a reminder that companies should carefully evaluate their needs and resources before embarking on this venture. In conclusion, while launching an Ethereum layer 2 network may seem like a tempting prospect for companies looking to tap into the growing demand for blockchain-based solutions, it is essential to consider whether it truly aligns with their business goals and capabilities. As Brody cautions, "companies should not just follow the crowd; they should think critically about what makes sense for them." *Reporting by Coindesk.*