Institutional crypto allocations are shifting from base-layer staking to yield-generating Layer-2 rollups. Total value locked across major optimism and zero-knowledge rollups rose 28% this quarter.
Yield Compression on L1
Ethereum mainnet staking yields have stabilized near 3.2%, driving asset managers to seek higher capital efficiency. Layer-2 protocols offering native yield via automated market makers and lending markets now command higher institutional order flow.
Regulatory and Execution Risk
Despite volume growth, sequencer centralization remains the primary operational risk. Asset managers cite decentralized sequencer roadmaps and cross-rollup bridge security as mandatory criteria before expanding allocations past current limits.