Logan Jastrzemski, an investor and co-founder of Frictionless Capital, said in an interview on May 20 that Ethereum is “almost dead” and that “the second layer (L2) network is a failed experiment.”
The technical argument presented by Jastremski is as follows. L2 only works for data compression:
When you think about blockchain, I always thought of it as data compression because that’s what the actual blockchain is. What is a transaction? A transaction is just a certain number of bytes. I’ll send you $10. This is represented by 5 bytes and must be propagated throughout the blockchain. And all L2 does is say, “I can compress these 5 bytes into 1 byte.”
Logan Jastremski, Reversalist.
From that interpretation, Jastremski argued that L2’s value proposition makes no sense at all. If the real function of L2 is to compress data, chains with greater capacity than those networks will do that job better and at scale. “If you want to use blockchain compression, why not use it on high-performance chains, where you can compress more data?
Logan further argued that Ethereum did not “decline” for technical reasons, but because it was adopted early. would have been driven by economic incentivesnot due to superiority of design.
I think Ethereum is primarily a product of the people who made money on Ethereum in the early days, including myself. But from an institutional perspective and a product use case perspective, Ethereum is pretty much dead for me. I think it will continue to slowly disappear, and I think it’s the most overvalued asset in the world.
Logan Jastremski, Reversalist.
Vadim, a researcher and developer in the cryptocurrency ecosystem, denied the paper’s technical basis. Jastremski believes that L2 does not exist to compress data, but rather confuses its effect with its purpose. Inheriting the security of Ethereum mainnetAccording to Vadim, compression is a secondary outcome of the economic model of data availability.
L2 pays Ethereum for payment security, not data efficiency. Compression is a side effect of data availability economics, not the goal.
Vadim, researcher and developer.
What does the Ethereum ecosystem’s on-chain data show?
Contrary to what investor Logan said, and as reported by CriptoNoticias, improvements introduced by Pectra (May 2025) and later Fusaka (December 2025) made the main network accessible. The network maintains the lowest fee levels while maintaining all-time high levels (ATH) for transactions and active accounts.
April 2026 was the month in which Ethereum processed the most monthly transactions in its entire history. Approximately 73 million operations in total. As of May 21st, this metric reflects approximately 42 million transactions, indicating that the fifth month of the year is probably down compared to April.
However, since January of last year, when the ATH of active accounts exceeded 15 million, this statistic has continued to trend negatively every month to date. At the time of writing this article, Ethereum registers approximately 6 million active addressesaccording to data from the Grow the Pie platform.
And what about L2?
Activity metrics for Base and Arbitrum, the two most popular Ethereum L2s, show a continued decline in on-chain data.
For Base, the number of transactions reached an all-time high in November 2025, with approximately 453 million transactions processed that month. April last year Marked 235 million cases, down 48%. As of May 21st, this number stood at 165 million, and monthly closings are expected to be even lower.
Arbitrum followed a similar trajectory. The previous highest number of transactions was 123 million in February 2026. In the first 21 days of May, Less than 30 million cases were processed, down more than 75% from its peak..
Similarly, the active addresses for both networks are also they are going down by the month As seen in the following graph. As of this writing, Base has registered 4 million active addresses and Arbitrum has approximately 1.46 million active addresses.
A possible explanation for this decline is the lower price and improved performance that the Ethereum network itself has seen in recent months, which may reduce the incentive to operate in the second tier.
If that reading is correct, as Logan suggested, the decline of L2 would not reflect a failure of the ecosystem, but rather a shift in activity to the basal layer.
(Tag translation) Blockchain
