Blockchain technology has made incredible strides since its inception, but the blockchain trilemma—balancing scalability, security, and decentralization—remains a significant challenge. Foundational Layer 1 networks like Ethereum and Bitcoin, while secure and decentralized, struggle with transaction speeds.
This is where Layer 2 projects come into play. By building on top of existing blockchains, these innovative solutions improve throughput without compromising security or decentralization. In this guide, we’ll explore the top 12 Layer 2 projects to watch in 2025, shaping the future of blockchain scalability and efficiency.
Importance of Layer 2 Projects
Layer 2 protocols are pivotal in addressing blockchain’s ongoing challenge of scalability. While Layer 1 blockchains like Ethereum and Bitcoin are renowned for their security and decentralization, their popularity has exposed limitations. For example, Ethereum processes on average around 1.1 million daily transactions but is restricted to just 15 transactions per second (TPS). Similarly, Bitcoin handles over 300,000 daily transactions on average, with a throughput limitation of just 7 TPS.
This bottleneck leads to network congestion, high gas fees, and slower dApp performance during peak activity. Popular Layer 2 technologies include rollups (optimistic and zero-knowledge), state channels, and sidechains.
Layer 2 solutions are not just critical for Ethereum, even though it is the most talked-about due to the large volume of daily transactions and activities on its blockchain. These scaling solutions are also being developed for Bitcoin, Solana, and other Layer 1 blockchains. They aim to enhance scalability across the ecosystem and enable long-term crypto adoption by reducing transaction costs and improving network efficiency.
Acting as separate chains operating atop the Layer 1 blockchain, they offload the transactional workload while maintaining the security guarantees of the mainnet. Through their integration with Layer 1 networks, these solutions ensure that innovations in DeFi, NFTs, and other decentralized applications can thrive without compromising the foundational strengths of decentralization and security.
Key Advantages of Layer-2 Scaling Solutions
Here’s what makes a Layer 2 solution essential for the blockchain ecosystem:
- Accelerating dApp and DeFi Growth: Layer-2 protocols enable decentralized applications (dApps) and DeFi platforms to operate faster and more affordably, improving user experience and unlocking new possibilities.
- Cost Efficiency for Traders and Users: By significantly reducing transaction fees, Layer-2 solutions directly enhance profitability for users, especially in DeFi activities like trading and yield farming.
- Driving Mainstream Adoption: Layer-2 networks make blockchain technology more accessible, paving the way for expansion into industries like gaming and supply chain management, far beyond traditional finance.
Top 12 Layer 2 Projects
In recent times, Layer 2 solutions have become critical for the scalability of blockchain networks. While Ethereum has had several established Layer 2 solutions for a while, we’ve seen growing momentum in Layer 2 development for Bitcoin and Solana. Ethereum’s dominant Layer 2 ecosystem continues to expand, but the rising activities on Solana have fueled the need for scalable solutions on its network.
With Solana’s performance peaking in recent times, it’s now witnessing the emergence of a range of innovative Layer 2 projects. Here’s a closer look at the top Layer 2 projects designed to enhance the performance of Ethereum, Bitcoin, and Solana:
Mantle – $MNT
- Throughput: 500 TPS
- Type: Optimistic Rollup
- Fees: 06 Gwei ~ $0.000216
- TVL: $463.15M+
- MCap: $4.121B+
- No. of dApps: 102+
Mantle, a high-performance Ethereum Layer-2 network, stands out with its modular architecture and innovative scalability solutions. Launched in July 2023, it combines Optimistic Rollups and EigenDA to address Ethereum’s congestion and high fees, enabling faster and more efficient transactions. As the first modular Layer-2 solution designed for hyperscale dApps, Mantle offers low fees and high security, making it a preferred choice for developers seeking scalable and reliable infrastructure.
Its modular design allows independent layers to be swapped or upgraded, enhancing performance and flexibility. With its transition to zero-knowledge (ZK) rollups through a partnership with Succinct, Mantle aims to deliver institutional-grade liquidity and settlement solutions. Its native token, $MNT, powers governance and gas fees, creating a seamless experience for developers and users alike.
Base – Coinbase Layer 2 Blockchain
- Throughput: 2000 TPS
- Type: Optimistic Rollups
- Average Fees: $0.0123
- TVL: $3.68B+
- MCap: NA
- No. of dApps: 438+
Base, Coinbase’s Layer-2 solution, is designed to make Ethereum faster and more affordable. Launched recently, it has quickly risen through the ranks, amassing over 225M+ unique wallet addresses. Using Optimistic Rollups and the OP Stack, Base processes transactions off-chain, reducing gas fees by up to 95% while maintaining Ethereum’s security. It’s also developer-friendly, offering seamless compatibility with Ethereum Virtual Machine (EVM), making it easy to migrate and scale dApps.
Backed by Coinbase’s resources and expertise, Base is positioned as a reliable platform for DeFi, NFTs, and gaming. Its focus on scalability, affordability, and security makes it a promising bridge between Ethereum’s challenges and its scalable future.
Arbitrum – $ARB
- Throughput: 2000-4000 TPS
- Type: Optimistic Rollups
- Average Fees: $0.0117
- TVL: $3.069B+
- MCap: $3.12B+
- No. of dApps:
Arbitrum, developed by Offchain Labs based in New York City, is a Layer-2 scaling solution designed to enhance Ethereum’s efficiency using Optimistic Rollups. By reducing gas fees by up to 95% and supporting over 4,000 TPS, it makes transactions faster and more cost-effective. Developers appreciate its compatibility with Ethereum, allowing smart contracts to be deployed with minimal changes. The project has even received praise from Ethereum founder Vitalik Buterin, highlighting its impact on the ecosystem.
Arbitrum also supports DeFi, NFTs, and gaming, with a growing ecosystem of applications. Its native token, $ARB, powers governance, rewards validators, and emphasizes community-driven decisions. Built by Offchain Labs, Arbitrum offers a secure, scalable, and developer-friendly environment while staying anchored to Ethereum’s security.
Optimism – $OP
- Throughput: 2000 TPS
- Type: Optimistic Rollups
- Average Fees: $0.0041
- TVL: $698.85M+
- MCap: $2.29B+
- No. of dApps: 268+
Optimism (OP) is a Layer 2 solution built to scale Ethereum by leveraging Optimistic Rollups, enabling faster transactions at a fraction of the cost. With an average throughput of 714 TPS—26x faster than Ethereum—it’s ideal for developers seeking scalability without sacrificing Ethereum’s security.
The native token, $OP, powers transaction fees, staking, and governance, making it a cornerstone of the ecosystem. Optimism’s Superchain initiative and thriving ecosystem of DeFi protocols, DAOs, and NFT marketplaces highlight its innovative approach. With over $700M+ TVL and a $2.29B+ market cap, OP is a strong contender among Layer 2 tokens.
ImmutableX – $IMX
- Throughput: 9000 TPS
- Type: Validium
- Average Fees: $0
- TVL: $27.88M+
- MCap: $2B+
- No. of dApps: NA
ImmutableX (IMX) is a Layer-2 solution tailored for NFTs, providing a seamless experience for creators, traders, and gamers. Built on Ethereum, it uses ZK-Rollups to offer near-instantaneous transactions, zero gas fees, and high throughput, making it ideal for the booming NFT space. With the ability to process over 4,000 TPS, ImmutableX removes the barriers of cost and delays, allowing for smooth NFT trading and minting.
The $IMX token is used for staking, governance, and covering fees, ensuring that users and developers alike have control over the network’s future. It’s particularly popular in the gaming industry, offering a frictionless experience for game developers who want to integrate NFTs into their projects. With its zero transaction costs and efficient ecosystem, ImmutableX has positioned itself as a top choice for NFT enthusiasts and developers looking to build on Ethereum without the high gas fees.
Starknet – $STRK
- Throughput: 2,000-4,000 TPS
- Type: ZK Rollups
- Average Fees: $0.002
- TVL: $207.7M+
- MCap: $881.1M+
- No. of dApps: 26+
Starknet is a Layer-2 scaling solution for Ethereum using ZK-Rollups, offering faster transactions, lower fees, and enhanced security. It supports up to 4,000 TPS while maintaining Ethereum’s integrity. Developers can use Cairo for scalable, privacy-focused smart contracts.
The $STRK token is used for governance and staking, empowering users to participate in decision-making and secure the network. Starknet’s Account Abstraction improves UX, making it ideal for both DeFi and privacy-focused projects. With its solid throughput and security features, Starknet is a promising choice for developers looking to scale their Ethereum-based apps.
Stacks – $STX
- Throughput:
- Type: Proof of Transfer (PoX)
- Average Fees: $0.75
- TVL: $124.59M+
- MCap: $2.07B+
- No. of dApps: 12+
Stacks ($STX) is one of the few Layer-2 solutions designed specifically for Bitcoin and is the largest scaling solution for the Bitcoin network. It brings smart contracts, DeFi, NFTs, and dApps to Bitcoin while maintaining its security. By using Proof of Transfer and linking directly to Bitcoin, Stacks ensures that all transactions are secured by Bitcoin’s base layer.
The $STX token is essential for executing smart contracts, processing transactions, and participating in network consensus. Its unique Clarity language enhances smart contract security and transparency. With initiatives like sBTC, a Bitcoin-pegged asset, and a growing ecosystem of DeFi and NFT platforms, Stacks is bridging Bitcoin with modern blockchain applications, offering substantial growth potential.
Polygon – $POL
- Throughput: 65,000 TPS
- Type: ZK Rollups
- Average Fees: $0.19
- TVL: $848.84M+
- MCap: $3.65B+
- No. of dApps: 549+
Polygon (POL) is a Layer-2 solution designed to solve Ethereum’s scalability problems. With its innovative dual-layer approach, Polygon allows for faster and cheaper transactions by offloading some of the transaction processing to sidechains. This results in an impressive throughput of 65,000 transactions per second (TPS), significantly improving Ethereum’s efficiency. Polygon also supports multiple scaling solutions like Plasma, zkRollups, and Optimistic Rollups, which further enhance its speed and reduce costs.
The $POL token is crucial here—it’s used for staking, governance, and transaction fees within the ecosystem. Thanks to its compatibility with Ethereum’s network and its focus on decentralization, Polygon provides developers a seamless way to scale their decentralized apps without compromising security.
ZKsync – $ZK
- Throughput: 100,000 TPS
- Type: ZK Rollups
- Average Fees: $0.0247
- TVL: $258.06M+
- MCap: $554.43M+
- No. of dApps: 124+
ZKsync ($ZK) is a Layer-2 Ethereum solution that uses zk-rollups to improve scalability and reduce costs. It utilizes recursive zk-SNARKs for efficient transaction validation, boosting throughput while maintaining security. As the second-largest zk-rollup for Ethereum by TVL, ZKsync has facilitated millions of transactions across a growing user base.
The $ZK token powers the platform and facilitates its decentralized governance. With EVM compatibility, ZKsync allows easy migration of Ethereum dApps, and its batching process can handle 100,000 transactions per second, offering low-cost, high-speed transactions.
Sonic SVM – $SONIC
- Throughput: Unknown
- Type: SVM rollup
- Average Fees: Unknown
- TVL: None
- MCap: $188.88M+
- No. of dApps: None
Sonic is a high-performance Layer 2 platform built for blockchain gaming on Solana, leveraging the Solana Virtual Machine (SVM) for lightning-fast transactions and low costs. Designed to process millions of transactions per second, Sonic enables fully on-chain game economies that settle on Solana L1, ensuring scalability and security.
With its HyperGrid framework, Sonic introduces EVM compatibility, allowing developers to write in Solidity and leverage the Ethereum ecosystem while benefiting from Solana’s speed. The platform’s atomic interoperability with Solana ensures seamless asset transfers, tapping into the Solana DeFi ecosystem. Additionally, Sonic’s built-in monetization tools and composable gaming primitives create a flexible, developer-friendly environment, making it a top choice for next-gen gaming projects.
Merlin Chain – $MERL
- Throughput: Unknown
- Type: ZK Rollups
- Average Fees: $0.000022
- TVL: $150.66M+
- MCap: $80.93M+
- No. of dApps: 18+
Merlin Chain ($MERL) is an innovative Bitcoin Layer-2 solution designed to improve Bitcoin’s scalability through ZK-Rollup technology. This method compresses transaction data, allowing for faster and cheaper transactions compared to Bitcoin’s main chain. Launched on testnet in early 2024, Merlin Chain is set to go live on mainnet soon. Alongside ZK-Rollups, it integrates a decentralized oracle network and BTC fraud-proof modules, enhancing both security and transparency.
The $MERL token serves as a governance token within the ecosystem, following the BRC-20 token standard for Bitcoin-native innovations. Its EVM compatibility facilitates interaction with Ethereum-based dApps, expanding its utility within the broader crypto space. Merlin Chain has built a solid developer community and a resilient asset ecosystem, ensuring its value remains stable even in volatile market conditions.
Eclipse
- Throughput: Unknown
- Type: RISC Zero
- Average Fees: Unknown
- TVL: $38.68M+
- MCap: NA
- No. of dApps: 7+
Eclipse is a next-gen Layer 2 blockchain that combines Solana’s high-speed execution via SVM with Ethereum’s security for settlement. Launched in late 2024, it integrates Celestia for data availability, delivering unmatched scalability and decentralization. Eclipse’s parallel execution model, inspired by Solana, allows high throughput and localized fee markets for increased efficiency.
With Ethereum’s liquidity and Solana’s speed, Eclipse provides developers with a powerful platform for seamless cross-chain integrations. Solana-native projects like Mango and Orca are already on board, highlighting Eclipse’s performance and flexibility as Ethereum’s fastest Layer 2 solution, with full SVM compatibility.
Bottom Line
Layer 2 solutions are reshaping the blockchain landscape by tackling key scalability challenges and driving mainstream adoption. Our top picks highlight the best in this space, but it’s essential to conduct your own research to find the projects that align with your needs and goals.
FAQs
1. How do Layer 2 solutions improve transaction speeds without compromising security?
Layer 2 solutions process transactions off the main blockchain (Layer 1) and then bundle or validate them on-chain using cryptographic proofs or smart contracts. This reduces congestion on the main chain while retaining its security features.
2. What is the difference between optimistic rollups and ZK rollups?
Optimistic rollups assume transactions are valid by default and rely on fraud proofs for validation if disputes arise, whereas ZK rollups use zero-knowledge proofs to instantly verify transactions, ensuring faster finality and lower latency.
3. Can Layer 2 solutions handle smart contracts?
Yes, most modern Layer 2 solutions, such as Arbitrum, Optimism, and Starknet, are fully compatible with Ethereum Virtual Machine (EVM) or provide their own environments to deploy and execute smart contracts efficiently.
4. Are Layer 2 solutions only for Ethereum?
No, while Ethereum is a primary focus, Layer 2 solutions exist for other layer 1’s as well like Bitcoin and Solana, and projects like Polygon have expanded to support multiple chains through interoperability initiatives.
5. Why is reducing gas fees critical for blockchain adoption?
High gas fees deter users, especially in high-volume networks like Ethereum. By reducing transaction costs, Layer 2 solutions make dApps, DeFi, and NFTs accessible to a broader audience, encouraging widespread adoption.
