5 Best Ethereum Layer 2 Blockchains to Boom in 2024

7 min read
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Explore top-tier Ethereum Layer-2 blockchains that are revolutionizing the 2024 blockchain landscape, offering enhanced scalability and a more user-friendly experience.

Blockchain technology has rapidly evolved since Bitcoin’s introduction in 2008, expanding from a decentralized payment network to powering diverse fields like DeFi, GameFi, NFTs, and the metaverse. As it moves towards mainstream adoption, scalability emerges as a key challenge. Traditional Layer-1 networks like Ethereum and Bitcoin, while foundational, lag in transaction speed compared to systems like Visa, processing only about 7 and 15 transactions per second, respectively, as of 2023.

As the blockchain ecosystem evolves, Layer 2 solutions are emerging as game-changers in enhancing scalability, speed, and efficiency by leveraging advanced technologies such as rollups, plasma chains, and sidechains. These networks, built on top of existing blockchain networks like Ethereum, capture billions of locked values and are poised to skyrocket in the upcoming years.

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Top Ethereum Layer 2 Blockchains by TVL. Source: Defillama

In this article, we’ll explore some of the most promising Ethereum Layer 2 blockchains that are shaping the future of decentralized applications and faster transactions in 2024.

Top Ethereum Layer 2 Blockchains To Watch In 2024

  1. Arbitrum
  2. Optimism
  3. Manta Network
  4. Base – Coinbase Layer 2 Network 
  5. Mantle
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What are Layer 2 Blockchains in Cryptocurrency?

Layer-2 blockchains are essential enhancements designed to improve the performance and scalability of primary, or Layer-1, blockchains such as Ethereum. These protocols operate on top of the main blockchain, effectively reducing network congestion, decreasing transaction costs, and increasing processing speed.

Picture a streamlined highway where traffic moves effortlessly, transactions occur at unprecedented speeds, and fees are so minimal they’re almost nonexistent. This is the realm of Layer-2 protocols in the crypto world, acting as the high-speed lanes on the Ethereum blockchain, dramatically enhancing its performance and scalability.

How Do Layer 2 Blockchains Work?

The essence of Layer-2 networks lies in processing transactions off the main chain and then aggregating them into a single, comprehensive transaction on the main blockchain. This method greatly alleviates network congestion, shortens processing times, and lowers transaction fees.

Layer-2 protocols serve as an efficient traffic control system, redirecting transactions away from the main blockchain for separate processing. This offloading significantly eases the load on the main blockchain, resulting in quicker transactions, reduced fees, and enhanced overall capacity.

How Do Layer-2 Scaling Solutions Benefit?

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Comparison table of best Ethereum Layer 2 solutions for 2024.
  • Fostering Growth in dApps and DeFi: Layer-2 protocols enhance the affordability, speed, and smoothness of decentralized applications (dApps) and DeFi platforms, broadening their potential and usability.
  • Enhancing Profitability for Users and Traders: These protocols offer a financial boon to traders and investors by substantially lowering transaction fees. This is particularly beneficial in DeFi activities like yield farming and trading, directly impacting profitability.
  • Facilitating Widespread Blockchain Adoption: Layer-2 networks are instrumental in driving the widespread adoption of blockchain technology. By making blockchain more accessible and user-friendly, these scaling solutions are extending its reach into various sectors beyond finance, including gaming and supply chain management, paving the way for broader acceptance and use.

Top 5 Layer 2 Blockchains To Watch in 2024

In this segment, we’re diving into the top 5 Layer 2 networks, offering a comprehensive comparison that caters to developers, builders, investors, and enthusiasts. We have selected these as the top 5 Ethereum layer 2 blockchains based on a few factors: the total value locked (TVL), their revenue (transaction fees in the last 30 days), their unique value proposition, and developer activity.

1. Arbitrum

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Arbitrum is the top 1 TVL Ethereum Layer2 Blockchain.
  • Throughput: 2,000-4,000 TPS
  • TVL: $4.1 billion
  • Market Cap: $2.37 billion+
  • Technology: Optimistic Rollup

Arbitrum, leveraging Optimistic Rollup technology, achieves a remarkable throughput of up to 4,000 TPS, greatly surpassing Ethereum’s mainnet by processing transactions up to ten times faster and cutting gas costs by approximately 95%. As of January 2024, it dominates the Ethereum Layer-2 market with over 51% share of TVL.

The Arbitrum Rollup is an Optimistic roll-up protocol that inherits Ethereum-level security. It allows users to enjoy faster speeds and cheaper transaction costs when interacting with Web3 dApps. Th ecosystem comprises many different elements, including Arbitrum OneNitroNovaAnyTrust, and Orbit.

The network is developer-friendly, offering easy deployment and a commitment to decentralization and community governance. Its ecosystem includes diverse DeFi protocols, NFT marketplaces, and gaming platforms. The native token, ARB, is integral for yield-farming, trading, and network governance. Despite being a newer Layer-2 solution with inherent risks, Arbitrum’s strong development team and active community support its ongoing evolution, making it a significant player in the Layer-2 space with a market capitalization of over $4.1 billion and over 530 decentralized applications (dApps).

2. Optimism

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OP Mainnet is a Layer 2 Optimistic Rollup network designed to utilize the strong security guarantees of Ethereum while reducing its cost and latency.
  • Throughput: 2,000 TPS
  • TVL: $1.1 billion
  • Market Cap: $3 billion+
  • Technology: Optimistic Rollup

Optimism acts as an extension of Ethereum, offering users and developers the robust security of Ethereum at significantly lower costs. This is achieved through the use of Optimistic rollups, a technology that efficiently compresses numerous transaction data into manageable batches, thereby drastically reducing transaction costs compared to those on the Ethereum mainnet.

Ranking as the second-largest Ethereum Layer 2 solution, Optimism has successfully locked in $1.1 billion within its smart contracts. It hosts a variety of protocols, including Synthetix, Uniswap, and Velodrome, making it a vibrant hub for diverse blockchain activities.

However, Optimism is more than a mere blockchain platform; it represents an innovative approach to sustainable ecosystem funding. Driven by protocol-generated revenue, its goal is to foster a sustainable future for Ethereum. This is primarily achieved through retroactive public goods funding, marking Optimism as a pioneering experiment in the blockchain space.

3. Manta Network

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The first EVM-equivalent ZK-application platform that is scalable and secure through Celestia DA and Polygon zkEVM.
  • Throughput: 4,000 TPS
  • TVL: $573 million
  • Market Cap: $903 million
  • Technology: zk Rollup

Tailored as Ethereum scaling solution, Manta is the first EVM-equivalent ZK-application platform that is scalable and secure through Celestia DA and Polygon zkEVM. It consists of two primary components: Manta Pacific, an EVM-compatible Layer-2 platform designed for efficient transaction processing, and Manta Atlantic, dedicated to private identity management using zkSBTs (zero-knowledge Succinct Biometric Tokens). At the heart of Manta’s technology is zero-knowledge cryptography, which verifies transactions while maintaining user privacy. The network also offers Universal Circuits, enabling developers to easily build privacy-focused DeFi applications.

In addition to its privacy features, Manta Network boasts considerable scalability, achieving 4,000 transactions per second (TPS) on Manta Pacific. Its EVM compatibility creates a developer-friendly environment, enhancing its appeal. The network also ensures robust interoperability with Ethereum and other blockchains through various bridges and Inter-Blockchain Communication (IBC) protocols.

The network’s native token, MANTA, is multifunctional, being utilized for staking, yield-farming, trading, and network governance. Since its inception, Manta Network has rapidly gained prominence, surpassing Base to become the third-largest Ethereum Layer-2 network by TVL as of January 2024 with $573 million.

4. Base – Coinbase Layer 2 Blockchain

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Base is a secure, low-cost, builder-friendly Ethereum L2 built to bring the next billion users onchain.
  • Throughput: 2,000 TPS
  • TVL: $729 million
  • Market Cap: NA
  • Technology: Optimistic Rollup

Coinbase‘s Base, a Layer 2 blockchain, is set to amplify Ethereum’s capabilities by boosting transaction speeds and slashing fees. Employing the OP Stack and Optimistic Rollups, Base aims for a throughput of 2,000 TPS, offering almost instantaneous transactions. Its goal to reduce Ethereum’s gas fees by up to 95% positions it as an attractive option for DeFi and NFT transactions.

Base capitalizes on Ethereum’s robust security framework while executing transactions off-chain, thereby ensuring the safety of assets. It’s tailored to be developer-centric, providing familiar tools and a seamless deployment experience. With the backing of Coinbase, Base enjoys the advantages of advanced security measures and access to a vast user base.

Currently in a phase of continuous development, Base’s commitment to speed, cost-efficiency, and developer support marks it as a Layer-2 solution to keep an eye on. As it expands its ecosystem and moves towards decentralization, Base has the potential to serve as a pivotal link in Ethereum’s journey towards a scalable and efficient future.

5. Mantle

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Mantle Network is an Ethereum rollup with Mantle Treasury and a token-holder-governed roadmap.
  • Throughput: 2,000 TPS
  • TVL: $177.13 million
  • Market Cap: $2 billion
  • Technology: Optimistic Rollup

Mantle stands out in the Layer 2 landscape by not just accelerating Ethereum transactions but also pioneering interoperability across various blockchain networks. Operating atop the Op Stack, Mantle introduces a distinctive infrastructure that facilitates seamless interactions between Ethereum and other major blockchains, such as Solana and Avalanche, effectively bridging previously siloed ecosystems.

Envision a world where transferring NFTs or DeFi assets across Ethereum and other leading chains is effortless, without compromising on speed or security. Mantle turns this vision into reality with its advanced cross-chain messaging protocol, enabling smooth atomic swaps and easy asset transfers across diverse blockchain platforms. This innovation not only expands possibilities for developers and users but also promotes wider DeFi adoption and enhances the overall cryptocurrency experience.

Mantle’s aspirations extend beyond just interoperability. It is poised to become a central hub for pioneering Web3 applications, with a special focus on high-performance gaming and metaverse initiatives. By offering low transaction fees, rapid finality, and cross-chain capabilities, Mantle provides an ideal ecosystem for these demanding applications, drawing in skilled developers and driving innovative breakthroughs in the rapidly evolving Web3 domain.

Conclusions

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In wrapping up, it’s worth reflecting on insights from Ethereum’s co-founder, Vitalik Buterin, regarding the Layer 2 space. In one of his recent discussions, Buterin highlighted an interesting trend: the growing diversity in Layer 2 projects. He predicted that this diversification would only increase over time. He also notes an intriguing shift where some projects, originally launched as independent layer 1s, are now gravitating towards the Ethereum ecosystem, potentially evolving into layer 2 blockchains.

“We are seeing a trend of layer 2 projects becoming more heterogeneous. I expect this trend to continue…”

Vitalik Buterin – Ethereum’s co-founder

In 2024, Layer-2 solutions will become more than just a passing crypto narrative; they’re a fundamental shift in the crypto world. Make sure you follow us and other top DeFi influencers to avoid missing any valuable insights.

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Disclaimer: This article serves informational purposes only and does not constitute financial advice. Conduct your own research before making investmendecisions.