I am old enough to remember when alternatives to the slow, clunky and costly Ethereum ETH blockchain would take its near 100% market share away. It was a little over two years ago. A lot has happened since, and now the Ethereum killers are being killed by Ethereum thanks to the Layer 2 solutions incorporated into the Ethereum system over the last year and a half.

The first L2 initial coin offering started way back in 2017-2018. Polygon MATIC was the first to go after Ethereum. They started the trend.

Most people with a Coinbase COIN account are into cryptocurrency as an investment. They bought the Ethereum token, ETH, not to use it pay for building decentralized applications (dapps) on the blockchain, but to turn a profit. They bought the Ethereum altcoins for the same reason, hoping to gain some alpha over ETH.

There’s been no alpha.

Over the last 12 months, Ethereum alternatives Polkadot DOT , Cardano ADA and Solana SOL Labs are all down over 45%. Ethereum is down, too, but only by 12%. The Invesco Nasdaq ETF ( QQQ ) is down 16%.

Except a day or two in February for Polkadot, only Ethereum has outperformed QQQ this year, from early March to around mid-May. Solana has had an excellent year-to-date, but they are making up for recent losses and are still down year-over-year.

MORE FROM FORBESLayer 2 Wars Heat Up As Coinbase Launches BaseBy Leeor Shimron

Read all about Layer 2 versus Layer 1 here.

For the lay investor, the best way to think about Layer 2 (L2) is as a bunch of companies that created ways to connect to Ethereum, with the same security of that blockchain.

Layer 2 is an umbrella term used to describe those solutions that build on top of Layer 1 blockchains to improve the scalability of the Ethereum network. In other words, L2 is an attempt to make Ethereum more usable for a greater number of people.

The alternatives are Layer 1 (L1) blockchains, as is Ethereum itself. Even though Polkadot and Solana Labs were designed as an alternative, the alts can all use the Ethereum Virtual Machine (EVM).

“Ethereum was early to market and capitalized on early adoption, building a strong reputation and a huge ecosystem of dapps. Many of these supposed Ethereum killers failed to scale up quickly and provide the functionality needed to convince developers to build on their blockchain instead,” says Hamid Fathalian, CEO & founder of a Dubai-based crypto gaming company called Landrocker.

Dapps for the blockchain are like apps found on a phone, only they come with the additional feature of being built and deployed using blockchain technology. Dapps are supposed to keep user data out of the hands of private companies.

Ethereum Investors Benefited from L2 Solutions, Beating Bitcoin

By 2020, crypto investors started to understand Ethereum’s problems and the solutions being built by the Layer 2 chains. Ethereum started to outperform bitcoin.

Over the last three years, ETH is up 1,110% while bitcoin is up 243%. I think it is safe to say those gains are due to the success of the L2s for Ethereum. The promise of L2s overshadowed any talk of loss of market share by newcomers.

“L2’s make Ethereum applications cheaper for users, so it’s easy for developers to deploy what they have already built on Ethereum, and community-wise it lets them keep an anchor on Ethereum,” says Awa Sun Yin, Co-Founder of Anoma, an intent-centric architecture. Anoma is an L1 blockchain. It brings different options for developers to build applications that cannot be built on Ethereum.

“We believe that most existing Ethereum dapps want to keep an anchor on Ethereum. L2s solved this problem for now but at the cost of centralization. Making existing dapps fully decentralized and scalable on Ethereum might involve decade-long roadmaps,” she says.

L2 blockchains like Coinbase’s new Base and Optimism OP , created by Ethereum staffers, were designed in a way that an Ethereum application can be basically duplicated and deployed to an L2 blockchain like Base - which makes it very easy for dapp developers to launch on those blockchain platforms.

The main issue with Ethereum alternatives like Polkadot and Solana and newer additions like Sui and Aptos APT is that they all provide marginal improvements in terms of speed or have a different consensus mechanism for approving transactions. Those that do not fundamentally bring anything new for dapp developers get treated like gambling chips for investors; or one step above a Dogecoin DOGE . (DOGE is down around 5% in 12 months, beating ADA and DOT.)

"There are no novel applications deployed on the Ethereum alternatives,” says Awa. “Overall, I don’t think there’ll be a strong reason why a dapp developer would build on an alt-Ethereum, unless the platform allows them to build applications that are impossible to build there,” she says.

L2s vs L1s: The Ethereum “Monopoly” Grows

Are Ethereum L2s undermining the value proposition of the Ethereum alternative L1 blockchains?

Not necessarily, says Ran Hammer, vice president of business development at Orbs in London, a software development company specializing in blockchain.

Ethereum is still the “mainnet” of decentralized finance and the larger ecosystem that seeks to develop products based on smart contracts and dapps, but from a user and developer perspective, Ethereum L2s operate very similarly to the alternative L1s.

“For them to be successful, they will generally need to interact with Ethereum, including by creating a token bridge between the Ethereum mainnet and the secondary chain,” Hammer says. “The competing L1s are also mostly EVM compatible. The differences are more in the back-end of how the nodes operate, reach consensus and other technical issues. Still, at the end of the day, the average user or developer has the experience of working on an independent chain linked in similar ways with Ethereum mainnet.”

Ethereum’s recent changes and improvements owed to L2 have narrowed its gap with the alts regarding speed, scalability and transaction cost. This has made some of the gains made by the first generation of competing L1s obsolete, and their price has has suffered in the market.

But, the L2 universe is changing too.

Coinbase’s L2 blockchain Base launched in February. Many mid-market cap L2s fell after that. Loopring LRC an L2 payment protocol, is down 50.2% since February. Celer Network (CELR) is down 41%. Cartesi (CTSI) is down around 19%. (Coinbase is up 27% since Feb. 1.)

“I don’t think it is going to be one approach that is better than the other,” says Hammer.

For Awa, who is building an L1, “if the value proposition for the Ethereum killers is ‘same apps, but cheaper and scalable’ then they’re already being threatened by L2 before Ethereum even becomes a scalable L1 chain.”

The Ethereum alternatives always needed to be more than just a faster, cheaper Ethereum. The success of the biggest Layer 2 players will thin the herd. L2 newcomers like Base will impact existing L2s struggling to gain traction.

“I think you will see that the L2s will stick, and some may kill the L1s that wanted to ‘kill’ Ethereum,” says Fisher Yu, the Sydney-based co-founder and CTO of Babylon, a protocol that allows you to stake your bitcoin to get yield, like a traditional fixed income investment. “The word ‘kill’ is a toxic mindset. Innovate, differentiate, collaborate, grow this market together: this is a healthier mindset for the crypto industry,” he says.

So far, I am unaware of any water cooler chatter about the big Ethereum rivals going bust.

“Solana, Near ( NEAR ), and Avalanche AVAX saw massive drops in value…but they could have something brewing,” says Tomi Fyrqvist, co-founder of Phaver, a social media app on the blockchain-based in Finland. “As long as their ecosystems can survive the crash,” he says.

Near and Avax are down 13% year-to-date. Solana is trying to recover from last year’s losses and is up 77% YTD.

The L1 vs the L2 Crypto Portfolio

If you put $10,000 into L2s Polygon (MATIC), Loopring, Celer and Cartesi 12 months ago, you would have lost 39% and now have $6,091 left.

If you put $10,000 in the L1s competing with Ethereum — Polkadot, Avalanche, Cardano and the Near Protocol, you’d be down 58.24% and now have $4,176 left.

The L2s have been a better investment.

For developers who use it, it’s hard to say. Though it seems the market has picked Ethereum. Investors are also better off in ETH than the L2s, judging by gains in the Ethereum price this year.

“Ethereum has had a large head start, but there are only approximately 12,000 developers and less than 5,000 full-time building on the Ethereum ecosystem. Compare this to the world's 12.5 million full-stack and backend developers. It puts things into perspective,” says Andrew Smith, founder and CEO of Versatus, an L1 blockchain. “Declaring Ethereum the winner is like declaring a winner in the quarter mile of a marathon.”

Ethereum can’t be a monopoly forever, can it?

“It was not good timing for alternative layer 1 blockchains – there is too much underlying risk,” says Fathalian, the gamefi executive in the United Arab Emirates. “We’ve seen many security breaches and hacks on the alts like Solana. Investors and project owners don’t need to take on that additional risk when they have stable and reliable Ethereum.”

*The writer of this article owns Polkadot and Cardano.