What is Layer 2? Best 15 Layer-2 Blockchains for 2025

If you’re exploring the cryptocurrency market, you’ve likely come across the term “Layer 2.” But what exactly is a Layer 2 coin? Why does this concept exist? What are the most prominent Layer 2 coins currently? Let’s dive into the details in the content below.

What is Layer 2? Best 15 Layer 2 Blockchains for 2025

What is Layer 2 Coin?

Layer 2 coins refer to cryptocurrencies created to address Ethereum’s scalability issues. The characteristic of Layer 2 is that it is built on the blockchain of Layer 1 (Ethereum), thus inheriting Ethereum’s security features, but with improved transaction speed and cost.

Ethereum is one of the most popular blockchains today with nearly 4000 dApps. The high usage of Ethereum has exposed its drawbacks, such as slow transaction speed, frequent congestion, and expensive gas fees.

=> To improve this, many solutions have emerged, known as Ethereum’s Layer 2.

In summary, Ethereum is Layer 1, while Layer 2 uses blockchains connected to Ethereum for transactions, aiming to overcome Ethereum’s shortcomings. Layer 2 projects are powerful tools for projects requiring numerous payment transactions, profit farming in Defi, minting NFTs, and smart contracts.

What are the Limitations of Layer 2?

What is Layer 2? Having learned about Layer 2 from the content shared above, you must have noticed its many advantages, right? However, Layer 2 coins also have several limitations, such as:

• Scaling Layer 2 faces the challenge of hindering interactions among different sidechains. Not all prevent this, but the majority will struggle with this issue.

• High transaction costs: Although fees on Layer 2 are much lower than Layer 1, they are still too high compared to other platforms. Especially, the cost to transfer assets from Layer 1 to Layer 2 is also very high.

• Layer 2 projects are still very new, only emerging in the past year, so they have many limitations and have not yet made significant breakthroughs.

• Although Layer 2 has many advantages, it does not mean that developers can easily develop products on Layer 2 as on Layer 1.

Objectively, the disadvantages of Layer 2 mentioned above are being focused on for resolution, and many notable faces are receiving positive feedback from the community, which we will explore in the following section.

Types of Ethereum Layer 2 Solutions

What is Layer 2? Although Layer 2 shares the common goal of addressing the limitations on the Ethereum network, Layer 2 coins themselves are: State Channel, Plasma, and Rollups, with Rollups further divided into two types: Optimistic RollUps and Zk RollUps.

Rollups for Zero-Knowledge

One of the most popular ways to process hundreds of blockchain transactions is using “ZK-rollups.” The main chain is relieved of some computational load because of this. Each time a state change is uploaded to Layer 1, ZK-rollups create SNARKs, or cryptographic proofs known as validity proofs.

Characteristics:

• ZK-Rollups reduce the amount of data needed to validate blocks, allowing for faster completion and lower costs.
• There is no delay in transferring funds from Layer 2 to Layer 1 with ZK-Rollups. This is because the previous ZK-rollup contract has already verified the legitimacy of the funds through validity proofs.
• Attacks, hacks, will not affect ZK-rollups.
• As data is still stored on Layer 1, the network maintains its decentralized and secure state.

Optimistic Rollups

Thanks to the Oracle VM Virtualbox (OVM) running on Ethereum’s foundation, some smart contracts can operate simultaneously without slowing down the network. This is feasible because OVM allows the execution of smart contracts similar to those that can run on the main chain. Thus, it maintains the compatibility of current smart contracts.

Existing alongside the main Ethereum chain, Optimistic Rollups exist. Because they do not perform any calculations by default, this two-layer approach supports in enhancing the scalability of the main chain. In other words, Optimistic Rollups can increase transaction scalability by 10 – 100 times, depending on the transaction, by addressing Ethereum’s slow computational issues.

Characteristics:

• Because Optimistic Rollups adhere to EVM and Solidity, they provide developers with functionality similar to Ethereum Layer 1.
• Layer 1 is responsible for storing all transaction data, making it a secure and decentralized solution.

Plasma

Plasma is a framework for building scalable DApps on Ethereum proposed by Vitalik Buterin and Joseph Poon.

The structure of Plasma allows for the creation of countless independent child chains that communicate and interact with the original Ethereum blockchain through smart contracts and Merkle-Trees.

Reducing the load of transactions from the main chain to the child chains makes transactions faster and cheaper. However, Plasma’s main drawback is the long withdrawal time from Layer 2 to the main chain.

Notable Plasma Framework projects include Matic Network, Loom Network, OMG Network.

Advantages:

• Low transaction costs.
• Increased blockchain throughput.
• Transactions between any two users can be done at zero cost as both users need to be connected to the plasma chain for this operation to work.

State Channels

State Channels are widely discussed off-chain scaling solutions in the Ethereum community.

They allow participants to conduct multiple off-chain transactions while only submitting 2 transactions to the original blockchain (Layer 1).

For example, A and B make a money transfer transaction. Both A and B will need to lock a certain amount of ETH in a Multisig wallet to open the Channel, after which they can perform as many transactions as they wish. Once finished, both close the channel and receive back the money they had locked previously.

The two most popular types of channels are State Channels and a subset of them, Payment Channels.

Although channels can significantly speed up transaction processing, they still have limitations such as 1) participants in the channel must be known in advance 2) the transaction amount must be locked in a multisig wallet.

This makes it difficult for Channels to be applied to generic smart contracts.

Some Channel projects include Raiden Network (P) Context Network, Counterfactual, Spankchain, Celer Network.

What Potential do Layer-2 Blockchains Hold?

Despite many areas for improvement in Layer 2 blockchains, their potential is undeniable. The EIP – 4488 update, which helps reduce the transaction costs of Layer 2 Rollup solutions, as well as the support from the cryptocurrency community in recent times, has affirmed the indispensable role of Layer 2 blockchains in Ethereum’s development vision.

Looking at it positively, Layer-2 has seen significant technological improvements and support tools compared to a few years ago. Updates like Op Stack make it easier for projects to develop Layer 2 solutions, such as Base, Coinbase’s Layer 2 solution.

There are many new Layer 2s being developed and have raised substantial funding. While becoming prominent is a difficult task, even if only 1 or 2 out of 10 projects we see are successful, it would be a significant contribution to the cryptocurrency market.

It should also be noted that Layer 2s do not need to wait until the infrastructure is strong enough to handle thousands or tens of thousands of transactions before developing a project. At each stage, different projects may be suitable. Just as Ethereum developed solutions like AMMs and Lending pools to solve liquidity problems and limited scalability, Layer 2 solutions can also develop projects that best fit the market context.

Top 10 Most Notable Layer-2 Blockchains 2025

What is Layer 2? Given the great potential of Layer 2 and its ongoing development, there are many new projects on the market. Some protocols have been well established, while others are upcoming projects (and you might want to explore for airdrop opportunities). Our view of the top 10 Layer-2 blockchain protocols for 2023 are:

Polygon (MATIC)

The Matic Network was founded in 2017 by Jaynti Kanani, Sandeep Nailwa, Anurag Arjun, and Mihailo Bjelic; later renamed Polygon Technology in 2021. Polygon is a very popular and successful scaling solution, focusing on the Ethereum network. They claim to be the “most adopted scaling technology” and are also aiming for carbon neutrality. Their goal is to create and produce open-source protocols that allow users to develop anytime, anywhere. They have very strong community values and always ensure that their developer community, partners, and users are strengthened. Polygon has received support from the biggest names in the industry, including Binance, Coinbase, Mark Cuban Companies, and Sequoia. Polygon has over 28 thousand Contract creators, 2.44 billion Transactions, 12.80 billion in NFT sales, and 1.17 million smart contracts deployed.

Arbitrum (ARB)

The Arbitrum (ARB) ecosystem was developed by the Offchain Labs team. The platform has identified the problems and limitations of traditional smart contracts on Ethereum and is striving to overcome these issues. They have addressed the problem of below-average efficiency and expensive costs these contracts face and are working towards providing users with a more seamless and efficient experience.

Arbitrum was founded by a trio, Ed Felten, Steven Goldfeder, and Harry Kalodner. They use roll-up blocks mechanisms to deliver what they promise. This unique method ensures that Arbitrum remains a safe and fair platform, while users can place their trust in the protocol.

Optimism (OP)

Optimism is a powerful Layer 2 blockchain, developed by Ethereum developers to effectively expand the network. Optimism uses Optimistic Rollup technology, aggregating individual transactions at the same time and combining them into a single transaction for processing on the Layer-2 sidechain. This reduces the transaction volume Ethereum has to handle, improving gas fees and transaction speed. Currently, Optimism and Arbitrum are the two Layer 2 blockchains attracting the most attention at this time.

zkSync Era

zkSync is another Layer 2 blockchain built on Ethereum, however, it uses the Zero-knowledge Rollup mechanism to enable network scalability. This platform is aiming to amplify Ethereum’s throughput while maintaining core values of freedom, autonomy, and decentralization while expanding the network.

The project is supported by some of the biggest names in the industry, including Blockchain Capital, Dragonfly, Andreessen Horowitz (a16z), Ethereum Foundation, Lightspeed, Bybit, Long Hash Ventures, Alchemy Ventures, Coinbase Ventures, CoinFund, etc. zkSync operates on a hyper-scalable model, enabling it to process a large number of transactions without compromising the platform’s safety or cost-effectiveness. More than 200 popular projects such as Chainlink, SushiSwap, Uniswap, Aave, Argent, 1inch, Gnosis, and Curve have registered to deploy on the zkSync Era.

Gnosis (GNO)

Gnosis is a Layer 2 blockchain among the first sidechains on the network. The protocol allows contributors from around the world to run nodes effectively, with Gnosis Chain having over 1,000 validators contributing to the platform’s security. Validators receive a yield of 15.98% and only need to invest approximately $111.65 as a starting cost. The team has not only a diverse group of validators but also ensures community governance to keep the chain reliably neutral without affecting the cost efficiency of the protocol compared to the mainnet. Gnosis Blockchain claims to be “VM-based and secured by home stakers from around the world. Gnosis has all the tools you are accustomed to using and will soon have ‘trustless bridges’ with the mainnet.”

Mantle

Mantle Network is a Layer 2 blockchain platform, launched as a modular chain solution for Ethereum’s expansion, developed by BitDAO. Mantle serves as a place for BitDAO to expand its Ethereum and Web 3 footprint, enabling developers to leverage it for Layer 2 exploitation. As built by BitDAO, Mantle Network will use BIT tokens as gas fees (transaction fees) in its ecosystem. Though Mantle is built by BitDAO for its own expansion, most blockchains today, such as Solana, Near, BNB Chain, and Ethereum, are monolithic blockchains – a type of blockchain processing all tasks (transactions, settlement, consensus…) on a single layer.

Scroll

Scroll is a Layer 2 blockchain built on zkEVM Equivalence, a rising ZK-Rollup technology, fully compatible with EVM, developed in early 2021. Scroll has implemented zkEVM to provide a better product development experience for programmers. Along with zkEVM, composability in Layer 2 will be stronger due to the standardization of programming methods, allowing Ethereum DApps to easily move to zk-Rollup chains without needing to modify much source code.

Currently, this platform has not launched its token, but it can be considered one of the more promising projects to explore and seek airdrops.

Linea

Linea is a zk Rollup Layer solution using zkEVM technology developed by ConsenSys – the parent company of famous projects like Metamask, Infura, Truffle, etc. By replicating the ecosystem and ambiance of the Ethereum network through Roll-up technology, Linea empowers developers to create and deploy smart contracts similar to the main Ethereum network. Linea offers user experience and benefits similar to Ethereum, but with significantly reduced transaction fees. It uses the bytecode of Solidity instead of custom compilers or transpilers, significantly reducing the risk of malware or hacking. The primary goal of Linea is to provide a high-quality, reliable, and secure Ethereum Virtual Machine without knowledge, always delivering the best possible level of quality and reliability.

Loopring (LRC)

Loopring is an innovative and breakthrough Layer 2 scaling solution, specifically designed to transform the world of decentralized cryptocurrency exchanges (DEX). Its main goal is to bring higher efficiency, security, and scalability to DEX transactions, which are rapidly becoming popular among cryptocurrency enthusiasts. Loopring leverages the strength and flexibility of the Ethereum blockchain.

One of the key features of Loopring is the use of ZK Proofs, enabling developers to create high-throughput, non-custodial DEXs that can support various digital assets. By utilizing this technology, Loopring has the potential to revolutionize the DEX market and improve the user experience for traders. Loopring’s unique blend of ZK transactions and DEX has the potential to make it a standout player in the decentralized exchange market. By creating a user-friendly and secure platform, Loopring is poised to attract a wide range of users, including traders and investors seeking a better trading experience.

Immutable X (IMX)

Immutable X (IMX) is one of the unique Layer 2 blockchains dedicated to non-fungible tokens (NFTs) and virtual asset transactions and minting. IMX integrates specially produced ZK-Rollups technology by pioneers at Starkware to achieve scalability without any compromises. This technology enables the platform to achieve scalability while maintaining the security and immutability of the Ethereum blockchain. By using ZK-Rollups, IMX ensures that all transactions are processed off-chain, significantly reducing the load on the Ethereum network and minimizing gas fees. Its mission is to support various Layer 2 and Layer 3 ZK-Rollups to meet the diverse needs of users. Many famous web3 games like Illuvium, GodsUnchained, and Kongregate are using IMX due to its user-friendly interface and powerful features. IMX’s main goal is to provide a quick and efficient platform for NFT transactions and minting while maintaining the core ideals set by the base network.

OMG Network (OMG)

OMG Network is a Layer 2 coin providing Ethereum with an Optimistic Rollup Layer 2 solution to reduce gas fees and improve transaction throughput for smart contracts.

A new project launched by OMG named Boba is expanding the capabilities of Ethereum Virtual Machine (EVM) smart contracts specifically for DeFi and NFTs projects running integrated on external servers like AWS to help execute complex algorithms not possible on-chain.

ZKSpace (ZKS)

ZKSpace is a relatively new Ethereum Layer 2 ZK-Rollup protocol providing nearly instant transactions without the need for block confirmation.

The ZK project typically offers Layer 2 NFT protocols for NFT projects by issuing, minting, airdropping, and selling NFTs more affordably. 2022 is an exciting year for ZKSpace, with many interesting developments scheduled to launch, including ZKSea – a Layer-2 NFT marketplace.

The ZKS token is used to save fees on Layer2 Wallet when swapping DeFi tokens and also used to pay for NFT mining on the Layer 2 marketplace.

SKALE Network (SKL)

Skale is a high-performance elastic blockchain network, offering transaction speeds 1000 times faster for Dapps on Ethereum.

Crypto projects often choose to rent a sidechain through Skale to boost transaction throughput using Ethereum 2.0 validators and sharding technology. This allows projects to execute smart contracts on blockchains provided by Skale to enhance DeFi services, games, NFTs, and content streaming services.

The SKL token is the network token of Skale, supporting the development and maintenance of the Skale ecosystem, and also serves as a reward for network validators.

Boba Network

Boba Network is a newcomer but has shown a structured approach to development and attracting new users to its ecosystem.

Boba Network also employs Optimistic Rollups solutions for convenient and faster deployment of new projects. The first names of its ecosystem, such as Oolong Swap, SenpaiSwap, Swapperchan, etc., are experiencing impressive growth.

• Layer 2 consists of projects created to address Ethereum’s scalability issues while inheriting Ethereum’s security.

• There are various Layer 2 solutions, but the most prominent are Rollups for Zero-Knowledge, Optimistic Rollups, Plasma, State channels, and more.

• Layer 2 projects are relatively new and need time to develop, so while useful, they come with several drawbacks. Nevertheless, their potential for the future is undeniable.

• Ethereum is currently the blockchain with the highest demand for scalability. This means Layer-2 projects will continue to gain attention and have great potential for the future.

• Many notable Layer 2 projects have emerged and attracted a significant user base, examples include Polygon, Arbitrum, Optimism, zkSync, Mantle, Boba Network, Loopring, OMG Network, Gnosis, etc.

This concludes our discussion about Layer 2 coins. We hope this article has provided you with a basic understanding of what Layer 2 coins are, their functions, and the most promising Layer 2 blockchains. If you have any questions, feel free to leave a comment below to share with us. Thank you for reading, and we wish you successful investments.