Google’s GCUL Blockchain and the Shift Away from Ethereum Layer 2s

Google is pushing ahead with the development of its own blockchain, GCUL, with launch planned for 2026. Other projects, such as Coinbase’s Base, are also focusing on self-management instead of using Layer 2 on Ethereum.

Google is serious about its blockchain ambitions and is eyeing a 2026 launch date for its proprietary solution, GCUL (Google Cloud Universal Ledger). For GCUL, Google is working closely with the CME Group, which operates the world’s most important derivatives exchange in Chicago. The goal is clear: Google Blockchain is intended to make the exchange fit for 24/7 derivatives trading, offering speed and low fees. Just two or three years ago, many experts would have thought that an existing Layer 2 solution on Ethereum, such as Arbitrum (ARB),  would be used to meet such challenges. But the tide has turned.

The trendsetter was arguably Coinbase’s Base, which went live in August 2023. Technologically, Base is also a Layer 2 on Ethereum, but Coinbase hasn’t generated its own token for its blockchain like Arbitrum and others do. The data service L2Beat  shows the Base Chain on its way to becoming the number one Ethereum Layer 2 blockchain in terms of how much capital is entrusted to a blockchain. Base has long been considered a separate ecosystem. Google’s GCUL, thanks to its cooperation with the CME Group, is expected to generate sums that exceed previous standards.

The crypto exchange Kraken also launched its own Layer 2 blockchain, INK , at the end of 2024 and has so far refrained from developing its own token. It’s the same story everywhere: large companies are showing little or no interest in using existing blockchain solutions, instead building their own versions. Whether decentralization is truly guaranteed seems to play only a minor role – the main thing is that the blockchain runs reliably.

Conclusion: Layer-2 with its own tokens in trouble – Google is shaking things up

Google expects that the GCUL blockchain will be used not only by the CME Group, but also by other major players in the financial industry. In the Layer 2 segment of Ethereum, Coinbase and Kraken are setting the trend with their own solutions. This poses a challenge for Arbitrum, Starknet (STRK), Optimism (OP), and ZKSync, which would have loved to have such customers as Ethereum Layer 2.

As an investor, you should keep this development in mind if you are considering investments in the Layer 2 sector. Arbitrum’s ARB is 80 percent behind its all-time high, Starknet’s STRK is 96 percent behind its record high, and Optimism’s OP is 85 percent off its best price – hopes for a recovery seem limited.

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(Featured image by Hitesh Choudhary via Unsplash)

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