☠️ Are Ethereum's L2s dying?

The generic rollup may be dying — but the Ethereum layer-2 ecosystem isn't. Base and Arbitrum hold 80%+ of DeFi TVL while smaller chains bleed out.  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ CoinDesk · The Protocol Ethereum's layer-2 boom isn't dead. The generic rollup may be. June 4, 2026 Weekly Issue Crypto Tech Development Welcome to The Protocol, CoinDesk's tech newsletter covering the most important stories in blockchain. I'm Margaux Nijkerk, a reporter at CoinDesk. This week, we're diving into the state of the Ethereum layer-2 ecosystem. ▮  Network News · Ethereum Not all Ethereum layer-2s are dying, but many no longer have a reason to exist When Zero Network announced it was shutting down last month, the reaction across crypto was weary: another Ethereum layer-2 just bit the dust. The closure joined a growing list of struggling rollups and came amid renewed debate about whether Ethereum's sprawling layer-2 ecosystem has become too crowded. At the same time, Ethereum creator Vitalik Buterin has urged developers to rethink the network's long-term scaling roadmap, while several major projects have shifted away from marketing themselves as general-purpose blockchains and toward more focused applications in payments, stablecoins and tokenized assets. Industry participants, however, argue the opposite. "We're in a consolidation phase for general-purpose layer twos, not layer twos broadly." — Ben Fisch, Co-founder and CEO, Espresso Systems Ethereum layer-2s exploded over the past several years as improvements in rollup technology dramatically reduced the cost and complexity of launching new chains. Rollups work by processing transactions off Ethereum's main blockchain, bundling hundreds of them together, and then periodically posting compressed transaction data back to Ethereum for settlement and security. The result was a flood of networks built using infrastructure stacks such as Optimism's OP Stack, Arbitrum Orbit and zkSync. But while launching a chain became easier, attracting users proved much harder. The numbers support that view. Today, activity across Ethereum's layer-2 ecosystem remains heavily concentrated among a handful of networks. Base and Arbitrum alone account for more than 80% of layer-2 DeFi total value locked (TVL), according to DefiLlama data. Source: DefiLlama That concentration has only become more apparent as smaller chains struggle to maintain liquidity. Over the past six months, networks including Linea, World Chain, Starknet and Mantle have all seen declining bridge deposits. Linea's deposits, for example, fell from $976 million in November 2025 to $367 million in May 2026, a decline of more than 60%. Source: Token Terminal "Without enough blockspace demand, user activity or developer traction, there is little reason to continue maintaining an L2." — Alice Hou, former Research Analyst, Messari Ironically, the economics of launching a rollup have never looked better. Ethereum's Dencun upgrade dramatically reduced the cost of posting rollup data to Ethereum through blobs. According to Messari research, data availability costs now represent only a small fraction of operator expenses for many OP Stack chains. That dynamic has created a paradox: the barriers to creating a blockchain continue to fall, but the barriers to attracting users continue to rise. From infrastructure to applications The shift is already visible across the industry. Several blockchain projects that once emphasized infrastructure are increasingly focusing on payments, stablecoins, tokenized assets and other application-specific markets. Fisch pointed to asset managers launching tokenized money-market funds, stablecoin issuers and tokenized deposit platforms as examples of businesses that have clear reasons to operate on-chain. For those firms, a dedicated layer-2 can offer lower costs, greater control and more predictable performance than deploying directly as a smart contract. That helps explain why exchanges remain among the strongest candidates. Coinbase's Base has become the dominant example, leveraging the exchange's existing customer base while integrating users into Ethereum's broader DeFi ecosystem. "The question should not be, 'Can this company launch an L2?' It should be: 'Does this business already have enough distribution, financial activity and ecosystem synergies to make an L2 meaningfully useful?'" — Alice Hou, former Research Analyst, Messari A different vision for the layer-2 landscape The debate also reflects a deeper disagreement about what layer-2s are actually for. For years, Ethereum advocates framed rollups primarily as a scaling solution for Ethereum itself. Fisch sees them differently. "I don't view layer twos as scaling Ethereum. I view layer twos as leveraging the existing security properties of layer one. Ethereum is sort of a commodity that layer twos can choose to use." — Ben Fisch, Co-founder and CEO, Espresso Systems If that trend continues, the future Ethereum ecosystem may look very different from the one imagined during the rollup boom. Instead of hundreds of competing general-purpose chains fighting for liquidity, the winners could be a smaller number of networks tied to specific businesses, financial products and user communities. By Margaux Nijkerk Full Story → Related 'You are not scaling Ethereum': Vitalik Buterin issues a blunt reality check to the biggest crypto networks → f X ● in T See all of CoinDesk’s newsletters    CoinDesk, Inc., 61 9th Avenue, 5th Floor, New York,NY,10011,USA, Unsubscribe Manage Preferences   Copyright © 2026 CoinDesk, All rights reserved.

The metric that has marked every BTC bottom just flashed

BTC hit $61,300 — the 200-week moving average. 10.5M BTC are underwater. Standard Chartered says this is the buying zone. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SPONSORED BY Thursday, June 4, 2026   Standard Chartered’s Geoff Kendrick says bitcoin is in “the buying zone” — but three ifs stand between here and a market low. BTC tumbled to $61,300 overnight, touching the 200-week moving average for the first time in this bear market, before recovering to ~$62,500. More than half of all circulating bitcoin supply is now held at an unrealized loss. The metric that has marked every prior bear market bottom just flashed. The question is whether that’s a floor or a doorstep to $50,000. Read today’s full report → Market snapshot As of 8am EST Asset Price 24h BTC $62,562 −6.60% ETH $1,750 −5.90% SOL $77.00 −5.30% XRP $1.20 −5.10% Prices approximate. Visit coindesk.com/price for live data. A message from CME Group The cryptocurrency market never sleeps, and neither should your ability to manage your exposure and capture opportunities. With institutional and active trader interest in digital assets continuing to grow, having access to reliable, continuous trading is more critical than ever. Building on this momentum, our comprehensive suite of Cryptocurrency futures and options contracts — available in both larger and Micro sizes — allow you to trade around the clock across major digital assets. What are the key advantages of 24/7 trading? Continuous performance: Trade 24 hours a day, seven days a week. Proven liquidity: Join a marketplace that handled over $3T in notional volume in 2025. Regulated marketplace: Benefit from the same transparency and oversight you trust — soon available every hour and every day. Don’t just watch the market — trade its potential. Find out more CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets. L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal. What matters today Markets   Story 1 of 3 Standard Chartered: three ifs stand between bitcoin and a market low. This is the buying zone. Geoff Kendrick, Standard Chartered’s head of digital assets research, says bitcoin is in “the buying zone” but outlines three conditions that must hold for a durable bottom: (1) the $60,000 level must not break, which Kendrick calls the critical threshold; (2) the 13-day ETF outflow streak must reverse; and (3) macro conditions must improve — either through a Fed rate signal, progress on Iran/Hormuz, or both. BTC touched the 200-week moving average at $61,300 overnight before recovering to ~$62,500. Every prior bitcoin bear market has ended in the vicinity of the 200-week SMA. Standard Chartered lowered its year-end BTC target from $150,000 to $100,000 in February but maintained that view; Kendrick’s current message: “When we look back at end-2026 with BTC at $100K and ETH at $4K, this will be the buying zone we all wanted.” Read more → Policy   Story 2 of 3 JPMorgan: time is running short for the crypto market structure bill. JPMorgan’s Washington policy team is warning clients that the legislative window for a comprehensive U.S. crypto market structure bill is narrowing fast. The Clarity Act — which would define the SEC and CFTC split for digital asset jurisdiction — advanced through committee but faces a packed Senate calendar, with budget reconciliation, defense authorization, and the debt ceiling competing for floor time before the August recess. If the bill does not pass before the recess, it would need to be reintroduced in 2027 with a new Congress — resetting months of bipartisan progress. JPMorgan’s note highlights the GENIUS Act stablecoin bill as more likely to move first given its narrower scope and broader support, but cautions that even that timeline is not guaranteed. The window is open; it is not wide. Read more → Markets   Story 3 of 3 This bitcoin metric has marked every bear market bottom. It just flashed. More than half of all circulating bitcoin supply is now held at an unrealized loss — 10.5 million BTC underwater versus 9.8 million in profit, per Glassnode data. This crossover of supply-in-loss over supply-in-profit has occurred at or near every major bear market bottom in bitcoin’s history, including November 2022 post-FTX, March 2020, and December 2018. BTC simultaneously touched the 200-week simple moving average at $61,300 — the long-term support level that previous bear markets also resolved around. The Power Law Oscillator has fallen to 4.4%, meaning bitcoin is cheaper than 95.6% of all historical readings relative to its long-term trend. None of these signals guarantee a bottom; the $60,000 support level and a reversal of the ETF outflow streak remain the two conditions analysts say must confirm before conviction is warranted. Read more → CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets. L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal. Crypto Daybook Americas: A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here.  Copyright © 2026 CoinDesk, All rights reserved.  CoinDesk, Inc., 61 9th Avenue, 5th Floor, New York, NY 10011, USA Unsubscribe Manage preferences

Stripe, Visa, Mastercard launch new stablecoin platform

BTC’s momentum gauge just turned positive. Experts say don’t chase it. Stripe, Visa, and Mastercard are backing a new stablecoin platform. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SPONSORED BY Wednesday, June 3, 2026   Bitcoin’s momentum gauge just flashed its first positive crossover since early May — and experts say don’t chase it. The MACD turned bullish against a backdrop that is still deeply challenged: the Coinbase Premium is negative, ETF outflows are at a record, funding rates are deeply negative, and DeFi TVL just hit a 20-month low. BTC is off another 3.5% overnight below $67,000. Meanwhile, Stripe, Visa, and Mastercard are making the most consequential move yet into stablecoin infrastructure — and it’s happening whether crypto markets are up or down. Read today’s full report → Market snapshot As of 8am EST Asset Price 24h BTC $66,994 −3.50% ETH $1,860 −2.90% SOL $78.00 −2.70% XRP $1.24 −2.40% Prices approximate. Visit coindesk.com/price for live data. A message from CME Group The cryptocurrency market never sleeps, and neither should your ability to manage your exposure and capture opportunities. With institutional and active trader interest in digital assets continuing to grow, having access to reliable, continuous trading is more critical than ever. Building on this momentum, our comprehensive suite of Cryptocurrency futures and options contracts — available in both larger and Micro sizes — allow you to trade around the clock across major digital assets. What are the key advantages of 24/7 trading? Continuous performance: Trade 24 hours a day, seven days a week. Proven liquidity: Join a marketplace that handled over $3T in notional volume in 2025. Regulated marketplace: Benefit from the same transparency and oversight you trust — soon available every hour and every day. Don’t just watch the market — trade its potential. Find out more CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets. L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal. What matters today Markets   Story 1 of 3 Bitcoin’s momentum gauge hints at recovery. Experts say: proceed with caution. Bitcoin’s MACD crossed into positive territory for the first time since early May — a short-term momentum indicator that has historically preceded local recoveries. But analysts are urging caution rather than celebration. The Coinbase Premium remains negative, signalling that U.S. institutional spot demand is still absent. ETF outflows just set an all-time record. Funding rates on perpetual futures are at their most negative in months, and DeFi TVL has hit its lowest since October 2024 as the fallout from the Kelp hack continues to drain deposits. BTC is down 11.6% on the week and below $67,000. The MACD crossover is a necessary but not sufficient condition for recovery — it needs confirmation from spot flows and a reversal in the Coinbase Premium to carry weight with institutional traders. Read more → Business   Story 2 of 3 Stripe, Visa, and Mastercard are backing a new stablecoin platform. It debuts soon. Three of the world’s largest payment networks are backing a soon-to-debut stablecoin platform, with Stripe, Visa, and Mastercard all named as participants. The launch arrives as Mastercard separately announced it will begin settling transactions in USDC and PYUSD across Ethereum, Solana, Polygon, Base, Arbitrum, and XRPL — enabling intraday, weekend, holiday, and on-chain settlement with Cross River, Lead Bank, CBW Bank, ARQ, and Nuvei as early adopters. Visa has simultaneously expanded its stablecoin settlement program to nine blockchains at a $7 billion annualized run rate, up 50% quarter-over-quarter. The simultaneous moves by all three networks in a single week mark the clearest signal yet that traditional payment rails are structurally integrating stablecoin settlement — irrespective of crypto spot prices. Read more → Sponsored Research   Story 3 of 3 Spot trading just hit its lowest level since November 2023. Volumes fell for a fourth straight month. CoinDesk Research’s latest exchange analysis shows spot trading volumes have declined for four consecutive months, reaching their lowest level since November 2023. The data reflects the same AI rotation dynamic visible in ETF flows: institutional capital that previously used crypto spot markets as a high-beta tech proxy is finding more direct exposure in Nvidia, SoftBank, and Taiwan Semiconductor. Derivatives volumes have also declined but at a slower pace, suggesting active traders are still engaging directionally even as spot liquidity dries up. The volume trough, combined with the MACD recovery signal flagged in Story 1, creates a setup analysts describe as “low-conviction but potentially significant” — the last time volumes and momentum aligned this way was in November 2023, shortly before the ETF-driven rally that carried BTC to its October 2025 peak. Read more → CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets. L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal. Crypto Daybook Americas: A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here.  Copyright © 2026 CoinDesk, All rights reserved.  CoinDesk, Inc., 61 9th Avenue, 5th Floor, New York, NY 10011, USA Unsubscribe Manage preferences