Ethereum Layer 2 Network Zero Network Announces Closure After One and a Half Years of Operation
Ethereum Layer 2 network Zero Network has announced its closure after one and a half years of operation.
The team stated that the vision of building a gasless rollup remains valid, but maintaining an independent blockchain is not the optimal path, and resources will be refocused on the parent company Zerion's API and wallet business.
User assets are secure, but NFTs, ETH, and other tokens must be cross-chain transferred out by the end of July, and new asset deposits have been suspended.
Source: Public Information
ABAB AI Insight
Zero Network, launched in 2024, focused on a gasless trading experience and was an expansion attempt of the Zerion ecosystem. Its closure continues the trend of many small to medium L2s exiting due to difficulties in maintaining TVL and developer activity, with several experimental rollup projects having previously chosen to shut down or be acquired.
On the capital front, Zerion is reallocating engineering resources, liquidity, and marketing budgets from the independent L2 to its core wallet and API services, motivated by the rapid concentration of the L2 market towards leading platforms like Arbitrum, Base, and OP Mainnet. Smaller projects struggle to create network effects and sustainable revenue, prioritizing cash flow and user retention for their main business.
Similar to the exits of several gasless or innovative mechanism L2s in 2025, and Zerion's early stable growth as a wallet aggregator, the current Ethereum Layer 2 industry is undergoing a transition from a broad project expansion to a dominance by three major players, with resources accelerating towards leading platforms and application layer tools.
Essentially, this represents capital concentration: the closure of independent L2s shifts pricing power from diverse experimental infrastructures to high TVL platforms and mature applications. While innovations like gasless transactions lower user barriers, they lack liquidity flywheels and developer lock-in, making it difficult to cover long-term maintenance costs, ultimately forcing teams to redirect limited capital back to more certain wallet and API businesses.
ABAB News · Cognitive Law
No matter how beautiful the vision, if TVL and developers do not follow, independent L2s are just expensive experiments. As the market becomes more concentrated, small innovations quickly turn into unsustainable cost centers. Resources will always chase places that generate revenue; wallets and APIs are the long-term moat.