Aug 7, 2025
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Imagine Ethereum as a busy highway. When traffic gets heavy, everything slows down, and tolls (or fees) go up.
That’s where Layer 2 (L2) networks come in.
Layer 2s, such as Arbitrum and Polygon, are like express lanes built on top of Ethereum. They handle most of the traffic off the main highway, allowing transactions to move faster and cheaper. They still rely on Ethereum’s strong security, and once the work is done, they send a summary of the activity back to Ethereum.
This setup helps prevent Ethereum from getting overwhelmed. As of mid-2025, over 85% of Ethereum activity, including trading, gaming, and NFT minting, occurs on Layer 2 networks.
However, there is a problem.
Since Layer 2 networks compress thousands of transactions into one, Ethereum earns fewer fees than it would if all that activity were to happen directly on its network. So even though Layer 2s are attracting more users and activity, Ethereum’s own revenue is slowing down.
Big profits for L2s, but where’s Ethereum’s share?
Since Ethereum’s Dencun upgrade in March 2024, a lot has changed in the world of Layer 2 blockchains. The upgrade added a feature called “blobs” that made it much cheaper for L2s to store and share data.
Before the upgrade, it cost around $40 million per month for L2s to settle data on Ethereum. After the upgrade, those costs dropped to almost zero. This means L2s like Base (Coinbase’s L2 network) are now far more profitable. For example, in May 2025, Base had a 98.3% profit margin and made $5.8 million in revenue, which puts it on track to earn over $70 million per year.
That means, most of the profit remains within the Layer 2 networks, and Ethereum itself has not experienced a significant increase in revenue.
To address this challenge, Consensys, the blockchain software company helping build the Ethereum ecosystem, has developed a Layer 2 network called Linea to help Ethereum increase its revenue.
How can Linea help boost Ethereum’s revenue?
Linea has proposed three key features:
- Earn rewards with Ether: If you move your Ether (ETH) to Linea, you’ll soon be able to stake (locking up crypto to help secure the network) it and earn rewards, without needing to convert it into another token or use third-party apps.
- Helping Ethereum stay strong: Linea will burn 20% of its transaction fees on the Ethereum mainnet. In the crypto world, "burning" means permanently removing tokens from circulation, which can help increase the value of the remaining tokens by making them more scarce.
- Fair token distribution: Instead of giving most of its tokens to insiders or early investors, Linea is committing 85% of its tokens to users, developers, and the broader Ethereum community. This helps keep things more decentralized and community-driven.
The bottom line
Linea’s new features are designed to create a two-way relationship where both Linea and Ethereum grow together. If it works, Linea could redefine what it means to be an Ethereum Layer 2. It’s not just about being faster or cheaper, but about creating a model where value is shared more fairly, Ether (ETH) is better supported, and long-term alignment with Ethereum is a priority, all of which matters greatly to retail investors looking for sustainable growth.
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