Ethereum News Today: CurveDAO Proposes Halting New Layer 2 Expansions Due to Low Revenue

A CurveDAO member has proposed halting future expansions of the decentralized exchange to additional Ethereum Layer 2 (L2) solutions, arguing that such extensions lack economic utility [1]. The governance proposal, if passed, would effectively prevent further development and deployment of Curve Finance’s protocol on other L2s, shifting focus back to existing infrastructure and core operations. This move has sparked debate within the DeFi community, with some seeing it as a necessary step to streamline efforts and avoid dilution of resources, while others view it as a potential setback for Ethereum’s broader scaling ambitions [1].

Layer 2 solutions have been a key part of Ethereum’s strategy to improve scalability and reduce transaction costs. Protocols like Aave, Uniswap, and Curve have already deployed on platforms such as Arbitrum, Optimism, and zkSync, offering users faster and cheaper transactions [2]. However, the proposal highlights concerns about the diminishing returns of extending to multiple L2s without clear economic justification. The Curve Finance community, which has previously embraced a multi-chain strategy, now faces a pivotal decision on whether to prioritize further decentralization or consolidate its efforts [1].

According to the forum post, layer-2 chains are not profitable for the protocol, bringing in a mere $1,500 per day for all layer-2 chains combined [1]. Developers also noted that maintaining these deployments is costly due to the fast-paced and short-lived nature of many L2s. In contrast, Ethereum pools generate significantly more revenue—on a slow day, they produce around $28,000, which is equivalent to the income from nearly 450 L2s [1]. Over the past 30 days, Ethereum contributed $1.65 million to Curve’s revenue, while all L2s combined contributed less than 1%.

The proposal suggests that developers should focus on Ethereum and work on meaningful projects such as expanding the use of scrvUSD [1]. It does not advocate for removing existing L2 deployments but rather for halting future expansions. The goal is to redirect the team’s efforts toward more impactful innovations rather than spreading resources thin across multiple, low-revenue chains.

This is not the first time a decentralized protocol has considered stopping layer-2 development. Two weeks prior, Aave co-founder Marc Zeller announced the suspension of Bitcoin Layer-2 BOB development, citing financial inefficiencies and the DAO’s leniency [1]. These developments indicate a growing industry trend of reevaluating the cost-benefit of multi-chain expansion strategies.

Curve Finance currently has a total value locked (TVL) of $21.451 billion, ranking second among DeFi protocols after Uniswap. In 2025, it generated $13.26 million in fees and $6.62 million in revenue, with a 30-day trading volume of $7.453 billion. The CRV token has shown a 63.3% increase in price over the last month [1]. These metrics reflect the platform’s strong position in the DeFi space, though the question of how to sustain growth remains open.

The debate comes at a time when Ethereum’s ecosystem is rapidly evolving. With the rise of alternative blockchains and the continued optimization of existing L2s, the pressure on DeFi platforms to adapt remains high [2]. Curve Finance’s current stance reflects broader industry discussions about the sustainability of multi-chain expansion. If the proposal gains traction, it could signal a shift in strategy for other DeFi protocols facing similar dilemmas [1].

On-chain analytics firms have noted that while L2s remain a critical part of Ethereum’s roadmap, their niche appeal may limit their broader adoption [3]. This suggests that while L2s offer significant benefits, their utility varies depending on the protocol’s goals. For Curve Finance, which has long prioritized liquidity and capital efficiency, the economic rationale for each new deployment is being scrutinized more closely [1].

The proposal does not indicate that existing L2 deployments will be abandoned. Instead, it aims to prevent the protocol from further diversifying into new chains without a clear return on investment. This aligns with a growing trend among DeFi platforms to reassess their expansion strategies in the face of shifting market conditions and resource constraints [1].

Curve Finance’s community-driven governance model allows members to shape the project’s direction, and this proposal is a reflection of that dynamic. Whether the community opts to limit future L2 development will depend on how it weighs the trade-offs between innovation, efficiency, and long-term sustainability. For now, the proposal is under discussion, with no immediate decision expected [1].

Source:

[1] Theblock, "CurveDAO member proposes slashing future Layer 2 deployments" (https://www.theblock.co/post/365307/curvedao-member-proposes-slashing-future-layer-2-deployments)

[2] Nasscom, "Layer 2 Blockchain Solutions in 2025: Scaling Ethereum and beyond faster and cheaper" (https://community.nasscom.in/communities/blockchain/layer-2-blockchain-solutions-2025-scaling-ethereum-and-beyond-faster-cheaper)

[3] MST, "On-Chain Data Analytics: How Web3 Startups Are Gaining Insights" (https://mstblockchain.com/blog)