Opinion: The limitations of Ethereum infrastructure prompt users to turn to L2 and other L1, which may lead to Liquidity fragmentation.

Odaily Planet News, Zeta Markets co-founder Anmol Singh said that as the demand for faster and more scalable solutions continues to grow, the limitations of the underlying infrastructure of the ETH mainnet are driving users, applications, and capital towards L2 solutions and competing blockchains like Solana. Singh said: "The emergence of ETH L2 is due to the fact that the underlying infrastructure is not sufficient to handle users, transactions, and data. Users and capital are migrating to L2 and other L1s out of necessity." QuarkChain and EthStorage founder Qi Zhou said that the increasing number of L2 solutions on Ethereum may lead to Liquidity fragmentation between different chains, affecting the entire ecosystem. Each L2 network, such as Arbitrum, Optimism, and zkSync, has its own independent Liquidity pool, leading to fragmentation. Users usually need to bridge assets between L2s, which increases friction and transaction costs. This decentralization dilutes Liquidity, making it more difficult to achieve Depth Liquidity pools in any single ecosystem. With Liquidity fragmentation, there is a risk of market efficiency drop, increased Slippage, and increased risk of large-scale Money Laundering, which may deter users from participating in L2. However, Zhou pointed out a potential solution to mitigate the fragmentation of ETH liquidity: 'Such protocols are emerging to provide cross L2 liquidity, enabling seamless asset flow between L2s and reducing fragmentation.' It is stated that solutions such as L2 rollup-to-rollup transfers or shared liquidity hubs native to Ethereum's L2 can help aggregate liquidity, making it more accessible across L2s. He added, "As the ecosystem develops, balancing scalability, Liquidity concentration, and user experience is crucial for maximizing adoption and practicality of Ethereum L2." (The Block)