Scenario 2 is, essentially, the status quo. The front line is frozen more or less where it is today. Neither the Ukrainians nor the Russians have the men and the firepower sufficient to win a major victory.
The most likely outcome here is a resolution similar to that of the Korean War; a negotiated armistice, but no peace treaty. Neither side pretends that the conflict has gone away. Both sides remain vigilant and hope for better things in the future.
Since the Russians have taken a tiny bit of territory, Putin has the opportunity to tell his people that they have won a great victory. His rule at home is unchallenged. But sanctions remain, a disproportionate percentage of the country’s GDP is being used for defense spending, and the Russian economy is in tatters. The future for the Russian people is looking grim, indeed. Ukraine, on the other hand, is being rebuilt by huge amounts of aid from America and the EU. Its future looks pretty bright.