ANALYSIS: Ether's L2 solution may raise market fears of liquidity fragmentation

The proliferation of ethereum Layer 2 solutions is raising concerns about liquidity fragmentation, according to several analysts. Patrick Liou, head of sales at Gemini, said that the emergence of multiple Layer 2 blockchains, while intended to address scalability concerns, has inadvertently weakened the operation and adoption of blockchains and their applications. While moving liquidity from one blockchain to another is not easy, advances in bridging applications are making the process smoother, and Gemini reports that a new Ether Layer 2 appears every 19 days, further exacerbating the problem of liquidity fragmentation.