According to Binance, Layer 1 scaling prioritizes base-chain security and decentralization while increasing throughput more conservatively, which directly affects gas costs and settlement assurance for ETH users, source: Binance Academy. Binance explains that rollups bundle many transactions off-chain and post compressed data to Layer 1, aiming to lower fees and raise throughput while inheriting L1 security, which impacts execution costs and reliability for active traders, source: Binance Academy. Binance adds that sidechains run in parallel with their own consensus and rely on bridges to connect to the main chain, typically offering lower fees but with distinct security assumptions traders must price in, source: Binance Academy. Binance states that Optimistic rollups use fraud proofs and typically involve longer withdrawal times due to challenge periods, affecting capital mobility and settlement timing across venues, source: Binance Academy. Binance notes that ZK-rollups use validity proofs for faster finality and generally quicker withdrawals back to Layer 1, improving capital efficiency relative to long challenge windows, source: Binance Academy. Binance emphasizes that bridges and smart contracts introduce additional risk and costs when moving assets between Layer 1, rollups, and sidechains, which traders should factor into strategy execution and hedging, source: Binance Academy.

According to the source, Celo, Ronin, Synthetix, and Aave are reported to be shifting activity back toward Ethereum after testing alternative Layer-1s, implying potential liquidity consolidation on the ETH stack if confirmed, source: the source. Celo’s community previously proposed moving to an Ethereum Layer-2 using the OP Stack, signaling a strategic pivot toward Ethereum scalability, source: Celo Forum. Synthetix concentrated incentives and the v3 roadmap on Optimism (an Ethereum L2), progressively reducing emphasis on alt-L1 deployments, source: Synthetix SIPs and governance. Aave’s core markets continue to prioritize Ethereum and leading L2s (Optimism, Arbitrum, Base), anchoring major liquidity within the Ethereum ecosystem, source: Aave Governance. Ronin operates as an EVM chain bridged to Ethereum, enabling asset mobility and settlement routes via Ethereum bridges, which makes a return path operationally feasible, source: Ronin documentation. Historically, consolidation around Ethereum has coincided with rising L2 TVL and relative ETH strength versus select alt-L1 baskets, informing rotation trades, source: L2BEAT and DefiLlama. Traders should monitor ETH/BTC, L2 TVL on L2BEAT, chain TVL share on DefiLlama, Ethereum gas fees on Etherscan, bridge net flows on Dune or Nansen, and alt-L1 funding rates/open interest on major derivatives venues to gauge migration pressure and adjust positioning, source: L2BEAT, DefiLlama, Etherscan, Dune, Nansen, and exchange derivatives dashboards. Key risks include incentive relaunches on alt-L1s and governance outcomes that could delay or alter migration timelines, which have shifted rotation timing in prior cycles, source: project governance forums.