Activity in the Ethereum (ETH) ecosystem is evolving, as L2 usage cools while value remains anchored on the base layer. The L2 to L1 daily active user (DAU) ratio fell to 1.12 in February 2026, down sharply from 2025 highs, showing fragmented user growth.
As execution expands across L2s, the base layer still guarantees settlement and liquidity, which preserves structural dominance. Stablecoin supply nearing $163.3 billion on mainnet confirms that capital continues to focus where finality and security remain strongest.
Fee dynamics reinforce this divergence, with base fees averaging 12.6 gwei and only 267 ETH burned per week, reflecting lower demand. As L2s contribute little to consumption, economic value remains linked to L1.
This shift suggests that Ethereum is consolidating as a capital hub, where liquidity is concentrated even as user activity disperses.
Ethereum Retakes Liquidity Dominance
This shift becomes clearer as user activity and liquidity stop moving together between layers. The ratio of L2 to ETH daily active addresses (DAAs) increased from around 2 in early 2023 to over 15 in mid-2024, showing that users quickly turned to L2s for cheaper transactions.
However, this growth did not last, as the ratio fell to around 10-11 in 2026, showing that user activity has slowed. This decline suggests that L2 use is weakening rather than expanding.
Capital shows a different trend, as the L2/ETH stablecoin ratio peaked near 0.30 before stabilizing around 0.20-0.22, meaning liquidity is holding up better than user activity.
This imbalance implies that value remains where security and flexibility are strongest. As a result, Ethereum remains the primary liquidity layer, even as activity spreads between L2s.
The role of Ethereum as a settlement layer
This trend is further reinforced by changes to regulations that influence capital flows. To illustrate the preference for regulated assets, Ethereum has gained approximately $9.6 billion, or 58% of the $16.5 billion RWA market, from institutions seeking compliant systems and reliable settlement.
As this demand increases, capital remains on the base layer as high-value transactions require strong security and finality. This explains why liquidity remains stable even if user activity spreads to cheaper L2 networks.
ETF flows support this trend, with spot ETH products attracting $9.9 billion in inflows through 2025 and assets under management exceeding $12 billion through 2026. This steady growth speaks to growing institutional confidence.
This trend indicates that Ethereum is consolidating its position as the primary layer for large-scale value settlement.
Overall, if this capital continues to grow, Ethereum can strengthen its role, allowing ETH to gain value as more activity moves to L1. However, if users remain on L2s while capital remains passive, growth may not translate into better price performance.
Final Summary
- Ethereum sees capital concentrated on L1 with $163.3 billion in stablecoins and a 58% RWA share, while L2 activity weakens.
- ETH now relies on active use of capital as L1 flows support strength, while passive liquidity can limit price gains.
