Ethereum Merge: What It Means for Layer 2 Cryptocurrencies

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The Ethereum Merge marked a pivotal shift in blockchain history, transitioning the network from energy-intensive Proof-of-Work (PoW) to sustainable Proof-of-Stake (PoS). While much of the attention focused on Ethereum’s environmental and economic implications, a critical question emerged: What does the Merge mean for Layer 2 cryptocurrencies?

As scalability solutions built atop Ethereum, Layer 2 (L2) protocols play a vital role in reducing congestion and transaction costs. With Ethereum’s core architecture evolving, investors and developers alike are evaluating how these networks will adapt—and potentially thrive—in the post-Merge era.

Which Layer 2 Coins Were Affected by the Merge?

The Ethereum Merge, completed in September 2022, did not directly alter Layer 2 protocols' functionality—but it reshaped the ecosystem in which they operate. The following major L2 projects were among the most impacted due to their deep integration with Ethereum’s infrastructure:

These networks rely on Ethereum for security and finality, meaning any fundamental change to the base layer influences their performance, cost structure, and long-term roadmap.

👉 Discover how leading Layer 2 platforms are adapting to Ethereum’s new era.

Why the Merge Matters for Layer 2 Cryptocurrencies

Despite the transition, Layer 2 solutions remain essential. Paolo Ardoino, Chief Technology Officer at Bitfinex, emphasized that the Merge alone does not solve Ethereum’s scalability challenges:

“Business as usual for L2s. These solutions still hold significant value for short-, medium-, and long-term scalability. Even 100,000 transactions per second may not meet global demand. We’ll still need L2s to handle growing blockchain adoption.”

The Merge was never intended to replace Layer 2 networks—it was designed to make them more efficient. By slashing energy consumption by over 99%, Ethereum became more attractive to institutional investors concerned about environmental impact. This shift indirectly benefits L2 ecosystems by increasing trust and capital inflow into the broader network.

Anton Gulin, Global Business Director at AAX Exchange, noted that L2 chains were already prepared for the transition:

“L2s won’t face major technical disruptions. The real question is how successfully the Merge gains momentum. With increased investment flowing in, we can expect even more powerful scaling solutions—L2s must adapt or be left behind.”

Debunking Myths About the Merge and Layer 2 Relevance

A common misconception is that Ethereum’s upgrades would render Layer 2 solutions obsolete. However, most experts agree this isn’t the case. In fact, Polygon Labs clarified in an official blog post:

“While the Merge paves the way for future upgrades like sharding, it alone is not enough to fully scale Ethereum. Our scaling solution will actually benefit from the transition, enhancing performance and sustainability.”

This sentiment reflects a broader understanding: Ethereum’s evolution complements, rather than competes with, Layer 2 innovations. The Merge sets the foundation for further improvements like sharding—a future upgrade expected to dramatically increase throughput—but until then, L2s remain indispensable.

Long-Term and Short-Term Outlook for Layer 2 After the Merge

Layer 2 networks have long served as critical tools for improving Ethereum’s user experience. Now, their trajectory is closely tied to Ethereum’s own progress.

Vlad Totia, Research Analyst at Zilliqa, explains:

“Every L2 built to scale Ethereum moves with it. If Arbitrum was faster than Ethereum before the Merge, and now Ethereum itself becomes faster and more efficient, Arbitrum scales proportionally. User and developer experience on L2s will evolve alongside Ethereum’s advancements.”

This synergy means that improvements at the base layer amplify gains across all dependent networks. Faster finality, lower base fees, and improved security create a stronger foundation for rollups, sidechains, and zero-knowledge protocols.

Moreover, Ethereum’s shift to PoS has environmental ripple effects. As highlighted by Polygon Labs in a widely shared tweet:

“The Merge will erase 60,000 tonnes of Polygon’s carbon footprint. Ethereum’s transition to PoS will have a singular impact on the carbon emissions profile of Polygon’s network.”

This alignment with sustainability goals strengthens the value proposition of both Ethereum and its Layer 2 ecosystem—making them more appealing to ESG-focused investors and enterprises.

👉 See how green blockchain innovations are reshaping investor interest.

Core Keywords Integration

Throughout this analysis, several core keywords naturally emerge due to their relevance:

These terms reflect user search intent around technical impacts, investment opportunities, and environmental considerations following one of crypto’s most anticipated upgrades.

Frequently Asked Questions (FAQ)

✅ Will Layer 2 coins become obsolete after the Ethereum Merge?

No. The Merge improved Ethereum’s efficiency but didn’t resolve scalability issues alone. Layer 2 networks continue to provide essential off-chain scaling through rollups, sidechains, and zero-knowledge proofs.

✅ How did the Merge affect transaction fees on Layer 2 networks?

Indirectly. While base-layer gas fees may fluctuate, L2s still offer significantly cheaper transactions. The PoS transition made Ethereum more stable and secure, benefiting all connected networks.

✅ Do Layer 2 projects need to upgrade after the Merge?

Most did not require major changes. Since L2s rely on Ethereum for finality rather than consensus mechanics, they continued operating seamlessly post-Merge.

✅ Is Polygon (MATIC) still relevant after Ethereum’s upgrade?

Absolutely. Polygon leverages Ethereum’s security while offering high-speed transactions. Its carbon-neutral alignment with PoS enhances its appeal for institutional adoption.

✅ What comes after the Merge for Ethereum and L2s?

The next major phase is sharding, expected around 2025, which will split the database into smaller pieces to boost throughput. Until then, Layer 2 solutions remain crucial for scaling.

✅ Can Layer 2 networks improve decentralization?

Some do—especially optimistic and zk-rollups that publish data back to Ethereum (on-chain data availability). However, trade-offs exist between speed, cost, and decentralization levels across different L2 designs.

Final Thoughts: A Symbiotic Future

The Ethereum Merge wasn’t an endpoint—it was a catalyst. For Layer 2 cryptocurrencies, it marked the beginning of a more sustainable, efficient, and scalable era. Rather than diminishing their importance, the transition reinforced their role in meeting global demand for decentralized applications.

As Ethereum continues evolving toward full scalability with sharding and danksharding, Layer 2 networks will remain vital components of its ecosystem—adapting, innovating, and expanding access to blockchain technology worldwide.

👉 Stay ahead of the next wave of blockchain innovation—explore emerging L2 opportunities today.