Ethereum’s L2 ecosystem in 2025 offers high investment potential due to scalability and cost efficiency, but fragmentation risks loom. Independent L2 tokens (e.g., Polygon’s POL) may reduce ETH demand, weakening Ethereum’s base layer. Arbitrum and Optimism dominate with over 80% TVL share, yet their self-reliance could create ecosystem silos. The Pectra upgrade and rising institutional adoption may counterbalance these risks, driving L2 growth. Investors should focus on L2s with strong developer activity and governance, but diversify to hedge against market volatility and potential declines in ETH’s utility.