Layer 2 networks such as Polygon, Arbitrum, and Optimism are now processing more transactions than Ethereum, with daily volumes between 2 to 4 million. Despite Ethereum's foundational role in Web3, its transaction activity is shifting to these L2 solutions. This transition is attributed to the efficiency and cost-effectiveness of L2s, although Ethereum's value as 'digital oil' remains intact, bolstered by EIP-1559. Critics highlight that the growth of L2s may lead to inflationary pressures as fees are captured off-chain. Meanwhile, Ethereum's total value locked (TVL) stands at approximately $660 billion, with expectations of further decline as more activity migrates to L2s. Nonetheless, market indicators such as open interest and funding rates continue to affirm Ethereum's status as a critical infrastructure component in the crypto ecosystem.