Crypto As currencies grow in popularity, so does the desire for faster and less costly transactions. Layer 2 (L2) solutions enable blockchain networks to scale, increasing transaction speeds and reducing costs.
What is Layer 2 Blockchain?
L2 is built on top of a blockchain, commonly known as the primary network. In this context, it is a term used to describe a specific scaling solution that extends the capabilities of the underlying blockchain. L2 is a separate blockchain that leverages its strong, decentralized security while processing transactions outside of the underlying blockchain. Layer 2 solutions reduce scaling and data-related constraints. Additionally, it aims to protect the security and distributed nature of the underlying blockchain. Additionally, it aims to offer faster and more cost-effective transactions.
Top 5 Tier 2 Coins
Layer 2 solutions have been developed to address the scalability issue. Additionally, it provides fast and scalable transaction execution while maintaining decentralized structures.
Polygon (MATIC)
polygon, formerly known as Matic Network, is an Ethereum Layer 2 scaling solution. It aims to offer faster and cheaper transactions while maintaining the security and decentralization of the Ethereum network. With a TVL of approximately $1.088 billion, Polygon has become one of the most popular Layer 2 solutions. It is considered the most popular mainstream Layer 2 solution for Ethereum.
Arbitrum
Arbitrumis an Ethereum Layer 2 scaling solution. Additionally, it aims to increase transaction volume and reduce fees by using optimistic rollups. Solidity is a developer-friendly platform with smart contract compatibility and a growing DeFi community. Arbitrum is generally considered the most effective Tier 2 option among developers.
Optimism
Another popular rollup scaling method for the Ethereum ecosystem Optimismis. This solution aims to be compatible with Ethereum while offering support for smart contracts and a thriving DeFi ecosystem. Optimism has over $1.009 billion in value secured. For this reason, it has the largest and most active DeFi ecosystem among Layer 2 systems. It is the most suitable Layer 2 solution in terms of Ethereum compatibility.
StarkEx
StarkEx is an Ethereum Layer 2 scaling solution that leverages zk-rollup technology to increase transaction throughput and lower fees. It aims to provide high performance with support for up to 9,000 transactions per second. StarkEx is the most effective Layer 2 solution with its high performance.
zkSync
zkSync is a Layer 2 scaling solution for Ethereum that uses zk-rollups to increase transaction throughput and improve security. It is designed to be secure, with support for zero-knowledge proofs and a focus on privacy. zkSync is considered the best Layer 2 solution for security.
In conclusion
The above layer 2 solutions enable blockchain networks to scale, increasing transaction speeds and reducing fees. These coins provide investors with the opportunity to potentially profit while benefiting from the growing demand for faster and cheaper transactions. However, before investing in any cryptocurrency you should do your own research and understand the risks involved.
