Fragmentation

Fragmentation refers to the division and isolation within the Layer 2 (L2) ecosystem of Ethereum, where multiple L2 projects operate independently without efficient interoperability. This lack of seamless communication and asset exchange between different L2 networks results in isolated ecosystems. Consequently, applications on separate L2s are unable to share liquidity or access the same user base, leading to inefficiencies and a compromised user experience. Users are forced to manage cross-chain transactions, multiple wallets, and face higher gas fees, all while facing an increased risk of security breaches due to the reliance on bridging tools.