Many companies are considering launching their own Ethereum layer 2 networks, but most should reevaluate. Only firms capable of aggregating substantial transaction volumes and lacking direct access to Ethereum should pursue this route. Layer 1 networks face stiff competition, while layer 2 networks leverage Ethereum’s strengths. Centralized layer 2 networks can set their price structures and control access, making them appealing, albeit costly. The layer 1 fees on Ethereum are low, creating a debate over whether this benefits layer 2 networks. Robinhood's recent plan to build a layer 2 network highlights this trend. However, most companies will find that directly connecting to Ethereum or existing layer 2 networks is more cost-effective. When determining the need for their own layer 2, firms should assess their transaction volume, whether on-chain transactions are vital to their business, and if they can offer a unique value proposition. Most firms may not need their own layer 2, leading to unnecessary launches reminiscent of past private blockchain attempts.

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