- Ethereum L2 debate returns as Robinhood launches an ETH-denominated Layer-2 network.
- Founders debate whether Layer-2s strengthen Ethereum or shift activity from its base layer.
- Leighton Cusack said Ethereum’s value comes from ETH adoption, liquidity, and asset issuance.
The role of Ethereum in the Layer-2 ecosystem is back in focus after the launch of Robinhood’s Ethereum-denominated Layer-2 network.
World Network co-founder Leighton Cusack argued that recent bullish developments are being framed as negatives because of weak market sentiment.
Cusack said Ethereum has been “so abused for the last two years” that even positive news, like Robinhood launching an ETH-denominated L2, is being portrayed negatively. “Narratives follow price,” he added.
L2s and Ethereum’s Value Capture
In response, Multicoin Capital managing partner Kyle Samani repeated his long-held view that Layer-2 networks are “parasitic to L1”. Cusack partially agreed but said the bigger picture matters more.
“In a narrow sense, yes,” he wrote. “In a broader sense, I don’t think a single L1 can support all of finance. Better to be the settlement layer than not involved in the flow of value.”
The exchange reflects popular debate over whether Layer-2 networks strengthen Ethereum by expanding its reach or weaken it by shifting economic activity away from the base layer.
Robinhood Chain’s ETH Model Under Scrutiny
Meanwhile, Bankless co-founder David Hoffman questioned what makes Robinhood’s new chain “ETH-denominated.”
Cusack replied that every native token on the network trades against wrapped ETH (wETH). He also noted that transaction fees are paid in ETH. Uniswap founder Hayden Adams expanded on the argument. He said ETH currently functions as money on the Robinhood chain.
According to Adams, ETH is the primary trading pair, the highest-volume asset, and the gas token used to pay for blockspace. He also noted that ETH is burned on Ethereum Layer 1 to pay data storage fees.
Memecoins Today, RWAs Tomorrow?
However, Hoffman argued that these features are not unique. He said Ethereum Layer-2 networks have operated this way for years while generating relatively little economic value for ETH.
He also said that most of the current activity is driven by memecoins. In his view, Layer-2 networks have increasingly evolved into independent blockchains by design.
Adams responded that he was simply explaining why the Robinhood chain is considered ETH-denominated. He acknowledged that most trading activity today revolves around memecoins. However, he noted that the network is only a week old and said its long-term goal is to support real-world assets (RWAs).
Cusack: Ethereum’s Value Goes Beyond Fees
The conversation later shifted to Ethereum’s value capture. An X user argued that Layer-2 networks contribute too little in settlement fees to Ethereum and that this is part of the ecosystem’s problem.
Cusack disagreed. Meanwhile, he argued that low transaction costs are a strength because they attract more users.
He also said Ethereum’s long-term value should not be measured mainly by settlement fees. Value comes from broader monetary effects, such as ETH becoming the primary trading pair across assets, strengthening its role as a store of value, and reinforcing Ethereum as the issuance layer for digital assets.
Related: Solana Labs Co-Founder Warns Ethereum L2s Are Not Quantum Safe
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