Arbitrum has emerged as the leading network for stablecoin inflows, attracting $381 million in the past week, while Ethereum simultaneously saw a significant outflow of $374 million from its network.
The insistent shift of stablecoin users away from Ethereum towards faster and less costly layer-2 platforms signals a clear preference for transaction speed and reduced friction. Arbitrum, an Ethereum layer-2 solution, has clearly gained the most from this trend, raising questions among market observers about the potential onset of what could be termed a liquidity “flippening,” wherein layer-2 networks might consistently overshadow Ethereum’s main layer in capturing economic value.
During the same period, Tron (TRX) also substantially benefited, garnering $102 million in stablecoin inflows. Tron recently overtook Ethereum to become the leading network for USDT supply, primarily due to increased usage related to stablecoin payments, notably in Asian markets.
On the other hand, Solana experienced significant pressure with stablecoin outflows totaling $239 million over the week. This downturn is largely attributed to an ongoing slowdown within the memecoin market, prompting investors to shift stablecoin holdings to alternative blockchains.
Arbitrum and similar layer-2 networks have grown in popularity due to their capability to offload transaction volume from the Ethereum mainnet, drastically reducing user transaction fees while maintaining alignment with Ethereum’s security and decentralization architecture. Yet, while these layer-2 platforms rely heavily on Ethereum’s robust infrastructure, they are increasingly absorbing a larger portion of the economic benefits from transaction processing and fee collection. This shift poses concern to ETH holders, who worry about declining revenue from transaction fees at Ethereum’s base layer that could ultimately compromise the network’s deflationary economic strategy.
Amid these concerns, Ethereum’s narrative has begun to shift positively following the recent rollout of its Pectra Upgrade. Industry leaders have advocated viewing Ethereum’s strategy not in terms of immediate profitability, but as a long-term approach aimed at sustainability through increased efficiency, lower transaction costs, and broader ecosystem health. In this vision, layer-2 solutions like Arbitrum become essential, integral components that complement and extend Ethereum’s capabilities rather than threaten them.
