Two Prime CEO says Bitcoin L2 yields are drying up as risks pile on

Alexander Blume argues layer-2 rewards are subsidies that shrink as deposits grow, while every new chain adds another way to get hacked Bitcoin holders have spent the past few years chasing yield on layer-2 networks. Two Prime CEO Alexander Blume thinks much of that yield was never real to begin with. In an interview on October 22, 2026, Blume described the rewards offered by Bitcoin layer-2 protocols such as Babylon and Stacks as “basically just VC-funded subsidies.” His argument comes down to arithmetic. More capital is chasing the same pot of incentives, so each depositor gets a smaller share. Blume warned that leaning on venture capital forever is not a sustainable model. Investors eventually want their money working toward something other than paying depositors to show up.

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