The Era of "Card Swiping" in L2: When the Scaling Story Ends, Payments Become the Lifeline
- Core Viewpoint: Currently, most Layer 2 networks face a severe crisis in user activity and transaction volume. In the absence of killer applications, pivoting to crypto payment cards (especially non-custodial cards) has become a key survival strategy for L2s seeking stable on-chain activity and practical use cases.
- Key Elements:
- Data Reveals L2 Traffic Woes: Starknet's daily TPS is only 2.64. Most general-purpose L2s (like Linea, Scroll, ZKsync) have extremely low TPS. Furthermore, except for Base and Arbitrum, the TVL of other L2s is severely mismatched with their high valuations.
- Protocol Revenue is Bleak: In the past 24 hours, only the top 7 L2 protocols had revenues exceeding $1000. Most revenues are meager, making it difficult to sustain ecosystem development.
- Crypto Cards Become the Common Path Forward: L2s (such as Scroll, Linea, Gnosis) are actively partnering with crypto card projects. By leveraging the per-transaction settlement feature of non-custodial cards, they are turning the high-frequency payment scenario into a stable source of on-chain transactions.
- Payment Strategy Case Study: Polygon has gained massive transaction volume through stablecoin transfers (like XSGD, AUDF) and acquired payment infrastructure companies, clearly positioning payments as a strategic focus.
- Industry Reality Check: The core objective for L2s at this stage has shifted from chasing novel application narratives to leveraging their low-cost advantages to first "survive" through payment scenarios.
Original Author: Eric, Foresight News
Recently, Solana made a joke about Starknet, mocking an L2 with only 8 daily active users and 10 daily transactions for having a $15 billion FDV.
In hindsight, this salt-in-the-wound style joke was meant to attract attention and lead into the announcement of Starknet's token STRK launching on Solana via NEAR Intents. However, Solana's criticism wasn't unfounded. The L2s that have sprung up like mushrooms in recent years are indeed facing a traffic crisis.
A recent and most convincing example is the L2 network Zero Network, incubated by Web3 wallet company Zerion, which was exposed on January 8th for having stopped producing blocks for over three weeks, seemingly without any impact. The official response was even more subtle. Zero Network stopped producing blocks on December 19, 2025, but the official statement about fixing the issue only came on December 23rd. The last original post from the Zero Network official Twitter account was back in May of the same year.
Nevertheless, the claim of only 8 users executing 10 transactions per day is an exaggeration. According to data from L2BEAT, Starknet's TPS yesterday was 2.64, meaning there were over 200,000 transactions on the network in a day. However, this number is still shockingly low. Even the Ethereum mainnet's daily transaction volume is 10 times that of Starknet.
Data shows that among general-purpose L2s, apart from Base and Polygon, even Arbitrum and OP Mainnet's TPS are not significantly higher than Ethereum's. Linea and Starknet have a TPS of less than 3. The part not captured in the screenshot includes Scroll with a TPS slightly over 1, and ZKsync, Blast, etc., with less than 1.
Looking at TVL data from DefiLlama, Base and Arbitrum together account for nearly 80% of all L2 TVL. The combined conservative valuation of the remaining L2s (not in the 'Others' category) during their private funding rounds is close to $10 billion, yet their combined TVL is less than $2 billion.
In terms of protocol revenue, only the top 7 protocols had revenue exceeding $1,000 in the past 24 hours. Daily protocol revenue in the three-digit or even two-digit range might not even compare to the interest some large holders earn daily from placing assets in exchange wealth management products.
This data vividly illustrates the current predicament of L2s: Against the backdrop of a lack of compelling application narratives, expecting a killer app that isn't an appchain and willingly operates on a general-purpose L2 has become a pipe dream. On the question of finding an application scenario that can provide stable transaction data, L2s have found the same answer: crypto cards.
Pavel Paramonov, founder of crypto research firm Hazeflow, once criticized that crypto cards are essentially not "crypto payments" but still fiat payments, failing to truly promote cryptocurrency adoption. However, he also noted that many projects or public chains launch crypto cards out of necessity, with the sole purpose of keeping users within their ecosystem.
Many crypto cards launched by exchanges today are "custodial" cards. User assets are held in exchange or institutional custodial accounts, and settlements during spending are handled by the exchange, off-ramp companies, and the card issuer. The settlement chains for such cards are typically Tron, Solana, or even the slightly higher-cost Ethereum. On one hand, the stablecoin reserves on these chains are sufficiently large. On the other hand, some cards reduce costs through batch settlements rather than per-transaction settlements. For institutions, liquidity and stability might be more important than the low cost of L2s.
The crypto cards that L2s are eyeing are various forms of "non-custodial cards." Before using such a card for payment, assets reside in the user's own wallet, and each payment is settled individually, effectively increasing on-chain activity. Typical examples include Scroll (settlement chain for Etherfi card), Gnosis, and Linea (settlement chain for MetaMask card).
In September 2024, Etherfi announced that its payment card would use Scroll as the settlement layer. Scroll helps Etherfi achieve "gasless transactions" and provides higher cashback percentages subsidized by the SCR token. Besides the traditional method of directly spending assets on Scroll, the Etherfi card has a special mechanism: users can borrow fiat currency for payments using yield-bearing assets on Scroll as collateral. Supported assets include eETH, weETH, wETH, eBTC, etc.
Gnosis, a sidechain that has long lacked presence, has managed to score a win in the payment card arena. Its card, Gnosis Pay, primarily operates in Europe. Users can connect non-custodial wallets like MetaMask and Gnosis Safe within the Gnosis Pay App. During spending, Gnosis Pay converts supported assets in the user's wallet (certain Euro, GBP, and USD stablecoins) into the Euro stablecoin EURe issued by Monerium, which is then converted 1:1 into Euros for payment.
The crypto card issued by MetaMask uses ConsenSys's L2 Linea as the primary settlement network, with additional support for Solana and Base. Before spending, users need to deposit supported payment assets (various USD or Euro stablecoins) into their MetaMask wallet. During payment, user assets are transferred to an off-ramp service provider, converted to fiat currency, and then paid to the merchant.
Due to the per-transaction settlement nature of non-custodial cards, each user purchase corresponds to a contract call to verify the remaining asset balance and an on-chain asset transfer. This way, L2s can rely on the absolutely high-frequency and sustainable scenario of payments to ensure a certain level of on-chain activity. According to Paymentscan data, Scroll, through its partnership with Etherfi and SCR subsidies, has captured a significant market share in card payments. However, this data isn't entirely accurate, as many card payments might not trigger on-chain transfers but are settled internally by institutions. Regardless, it's an undeniable fact that L2s have found a practical application scenario through payments.
It's not just emerging L2s that are anxious. Polygon, which isn't strictly an L2, also shifted its strategic focus towards payments recently. By the end of 2025, non-USD stablecoin transfer volume on Polygon exceeded $11.1 billion, with new stablecoin XSGD trading volume reaching $2.24 billion and Australian dollar stablecoin AUDF trading volume reaching $2.46 billion. Furthermore, Polygon has become one of the primary chains used by Stripe for stablecoin payments. Its announcement on January 13th to acquire crypto payment infrastructure Coinme and blockchain development platform Sequence for a $250 million consideration clearly signals its "all-in on payments" strategy.
After enduring a bombardment of various concepts, L2s have come to terms with reality. While they still anticipate novel applications, the immediate priority is to survive by leveraging their low-cost, high-efficiency characteristics through payments.
