$9.75M Trapped on Dying Ethereum L2 Before New Year’s Eve Deadline

Silicon Network, an Ethereum layer 2 built on Polygon CDK, stopped accepting deposits on September 2 and will shut down its network and explorer on December 31. Users must withdraw approximately $9.75 million in assets before that deadline or lose access permanently.

The shutdown affects Korbit’s Web3 Wallet, a service that gave South Korean exchange customers access to decentralized finance and applications on Silicon. The wallet is being discontinued less than two years after launch. Korbit integrated Silicon to connect centralized-exchange users with Ethereum’s onchain economy through Agglayer infrastructure.

According to L2Beat data, the network holds $2.66 million in USDC, $2.54 million in WBTC, $2.08 million in ETH, and $1.85 million in USDT. Assets originally bridged from Ethereum can return to mainnet during the withdrawal window. Tokens issued directly on Silicon cannot be bridged to Ethereum and depend on liquidity remaining in the network for conversion.

Silicon Network stated the consequences plainly: “This network is a non-custodial service, meaning that the custody and withdrawal of assets are managed directly by each user. Once the service has been terminated, assets that have not been withdrawn cannot be recovered.”

The network added: “Whether and how to handle these tokens is a decision to be made at the user’s own discretion and responsibility. Once the network has been fully terminated, recovery will not be possible.”

Consolidation Among Layer 2s

Silicon’s shutdown reflects broader concentration in the Ethereum layer 2 ecosystem. Base and Arbitrum now hold more than 80% of roughly $30.5 billion in assets tracked across Ethereum layer 2 networks by L2Beat, totaling $24.7 billion combined.

Earlier this year, Vitalik Buterin, Ethereum’s co-founder, argued that the original vision of layer 2 networks as Ethereum’s “branded shards” no longer fits as the base layer scales and L2s develop at different speeds. Silicon’s closure illustrates the pressure smaller networks face as capital consolidates around larger competitors.