TLDR
Activity slowed on several Ethereum Layer 2s this week. The clearest evidence points to Base (large contraction) and HyperEVM, with social and media reports also flagging liquidity outflows around Arbitrum.
- Base: transactions fell about 75% with fee revenue down 63% in recent period, signaling a sharp contraction in usage (report).
- HyperEVM: among the steepest short?term declines, with fees down 46% and transactions materially lower (report).
- Rotation: multiple observers note liquidity moving from L2s back to Ethereum L1; biggest loser called out as Arbitrum (ARB) alongside a claimed $1B L2 stablecoin outflow in December (social post).
Deep Dive
1. Base Contraction
Base recorded one of the largest recent pullbacks, with transactions down roughly 75% and fee revenue down 63%, indicating reduced short?term usage relative to prior weeks and months. The same analysis shows synchronized slowdowns across several networks in the last 30 days, setting the tone for this weeks L2 activity picture (report).
This cooling coincides with renewed direct activity on Ethereum L1, where daily transactions reached about 2.2 million while fees stayed near record lows, suggesting settlement-layer capacity expanded and some usage shifted back to mainnet (update).
If you track Base-native apps, watch daily transactions and fee revenue. A sustained rebound would signal returning engagement; otherwise, mainnet may be absorbing flows.
2. HyperEVM And Other L2s
HyperEVM showed one of the steepest short?term declines, with transactions materially down and fees falling 46% (report). Beyond this week, several L2s struggled to retain liquidity through 2025: OP Mainnets TVL fell about 64% and Linea lost roughly half, while Mantle bled 23.5%, underscoring fragility when incentives fade (analysis).
These data points frame this weeks slowdown as part of a broader cooling in on?chain usage rather than an isolated blip.
For L2s reliant on incentives, expect activity to be volatile. Sustainable usage usually requires sticky apps, deeper liquidity, and fewer mercenary flows.
3. Liquidity Rotation And ARB Outflows
Market observers continue to highlight rotation from L2s back to Ethereum L1, citing stronger settlement liquidity and low fees. One widely shared update named Arbitrum (ARB) the biggest loser in recent liquidity terms and claimed L2s collectively shed about $1B in stablecoin liquidity in December (social post).
That said, not all signals agree: other coverage has previously highlighted 2025 net inflows onto Arbitrum even as token price lagged, illustrating how activity and price can diverge across different measurement windows (overview).
Treat weekly liquidity anecdotes with caution. Verify depth on the top venues and monitor stablecoin balances and active addresses to separate durable shifts from noise.
Conclusion
This weeks slowdown is most evident on Base and HyperEVM, with broader commentary pointing to liquidity rotating back to Ethereum L1 and pressure around ARB. The pattern fits a larger trend: incentives fade, fees stay low on L1, and activity consolidates into deeper venues. If you need exposure to L2 growth, focus on networks with sticky applications and real liquidity rather than short?term incentive spikes.
Confidence: moderate due to mixed windows (weekly versus monthly) and reliance on some social sources; quick verification step is to check each L2s current transactions and fee revenue on reputable analytics this week.
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