Top Layer-2 Blockchain Solutions in 2024

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Top Layer-2 Blockchain Solutions | Best in 2024
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Jesse Anglen
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Table Of Contents

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    Blockchain

    1. Introduction

    Ever since Bitcoin brought about a cryptocurrency revolution in the world since its breakthrough in 2013, when its prices had a 51% increase within 12 days of November, there have been several new blockchain platforms that have emerged in its wake. However, a vast majority of these blockchain platforms face issues related to their scalability due to the challenges of low transactions and high latencies. To address and overcome these issues, blockchain platforms and blockchain technology is often regularly modified with new and improved features being added in the form of layers, and this is where Layer 2 Blockchain Solutions come in.

    Layer 2 blockchain solutions are defined as improvements on Layer 1 traditional blockchain solutions which have limitations in their design regarding transaction processing rates, fees, and periods. Because of their numerous features and advantages in comparison with Layer 1 blockchain solutions, Layer 2 blockchain solutions continue to make major strides in the market, with their Total Value Locked (TVL) surpassing the $20 billion mark in 2024. 

    In this blog, we will be discussing the top most Layer 2 blockchain solutions that have brought about considerable improvements in how blockchain platforms operate. Along with that, we will also be discussing the reasons why Layer 2 blockchain solutions have gained a crucial position in today’s blockchain ecosystems. So let’s begin, shall we?

    2. Key Features and Benefits of Layer 2 Blockchain Solutions

    You must be wondering why there’s such a big deal about Layer 2 blockchain solutions these days. In this section, we will elaborate on the key features and benefits of Layer 2 blockchain solutions that will explain the reasons behind their current prominence:

    2.1. Scalability Enhancements

    The primary feature of Layer-2 blockchain solutions is the ability to drastically increase the scalability of blockchain networks. This is achieved by processing transactions off-chain or through secondary layers and periodically consolidating them on the main blockchain. The result is a substantial increase in transaction throughput, allowing blockchain systems to handle thousands of transactions per second (TPS) compared to the low TPS of Layer-1 solutions.

    For instance, Ethereum’s Layer-1 can only handle around 15-30 TPS, while Layer-2 scaling solutions like zk-rollups or optimistic rollups can achieve up to 4,000 TPS or more . This scalability is critical for blockchain adoption in areas like decentralized finance (DeFi), gaming, and NFTs.

    2.2. Cost Reduction

    Layer-2 solutions also bring significant cost reductions by minimizing the gas fees associated with on-chain transactions. By bundling multiple transactions together and settling them in a single batch on the Layer-1 chain, Layer-2 networks can spread the cost across a larger number of users, leading to cheaper individual transaction costs.

    For example, Ethereum Layer-2 solutions such as Arbitrum or Optimism have reduced transaction fees by up to 100x compared to on-chain Ethereum transactions . This reduction is crucial for enabling microtransactions and making blockchain-based applications more economically viable.

    2.3. Improved Transaction Speed

    Faster transactions are another important feature of Layer-2 blockchain solutions. By handling transactions off-chain or in parallel to Layer-1, Layer-2 platforms drastically reduce confirmation times. Transactions can be confirmed in seconds rather than minutes, making Layer-2 blockchains ideal for use cases like payment processing, real-time gaming, and decentralized exchanges (DEXs).

    Layer-2 networks like Polygon, for example, are helping reduce transaction confirmation times on Ethereum from several minutes to less than two seconds .

    2.4. Security Inheritance

    One of the standout benefits of Layer-2 solutions is their security model. Rather than compromising on security for scalability, Layer-2 blockchains inherit the security of the underlying Layer-1 chain. This means that while transactions may occur off-chain or on a secondary network, the final settlement and dispute resolution occur on the Layer-1 blockchain, ensuring a high level of security and trust.

    This feature is particularly beneficial for industries that rely on strong security guarantees, such as finance, healthcare, and supply chain management.

    2.5. Energy Efficiency

    Layer-2 solutions are more energy-efficient compared to Layer-1 networks. Since they reduce the need for every transaction to be processed directly on-chain, Layer-2 protocols significantly cut down on the computational energy required to maintain the network. This energy efficiency makes them more sustainable and aligns with the growing global push towards eco-friendly technologies.

    For example, using Layer-2 solutions can decrease Ethereum's carbon footprint by over 90% compared to performing all operations on Layer-1 .

    2.6. Interoperability

    Layer-2 blockchains often offer cross-chain compatibility and interoperability. This allows users and developers to move assets between different blockchain networks more easily. For example, Polygon enables interoperability between Ethereum and other chains, allowing seamless asset transfers and interactions across ecosystems.

    Interoperability between different Layer-2 and Layer-1 blockchains will be a key driver of growth in blockchain technology adoption across diverse industries.

    2.7. Support for Smart Contracts and dApps

    Many Layer-2 blockchains are fully compatible with smart contracts, enabling decentralized applications (dApps) to operate more efficiently and at scale. Developers can deploy their applications on Layer-2 platforms like Optimism or zkSync without having to rewrite their code, ensuring seamless integration and fast adoption.

    This feature is crucial as the number of dApps continues to rise across industries such as gaming, finance, and NFTs. According to recent data, over 70% of the top dApps on Ethereum are now exploring Layer-2 solutions for scalability.

    3. Layer 1 vs. Layer 2 Blockchain Solutions: Which One is Superior?

    Layer-1 Blockchain vs. Layer-2 Blockchain Solutions

    The general use cases of Layer 1 and Layer 2 blockchain solutions might differ, but it is still important to understand which one is a superior choice of solution in general. Here’s a comprehensive comparison between the common features of Layer 1 and Layer 2 blockchain solutions to highlight why Layer 2 is better:

    Features Layer-1 Blockchain Layer-2 Blockchain Which One Gets The Edge?
    Scalability Low scalability, typically handling a limited number of transactions per second (e.g., Bitcoin 7 TPS, Ethereum 15-30 TPS). High scalability, capable of processing thousands of transactions per second (e.g., zk-rollups can handle 4,000 TPS). Layer-2 Blockchain
    Transaction Costs High gas fees due to network congestion and on-chain processing of each transaction. Significantly lower fees by bundling transactions and reducing on-chain activity (up to 100x lower transaction costs). Layer-2 Blockchain
    Transaction Speed Slower transaction times (can take several minutes for confirmation depending on the network). Near-instant confirmations (often within seconds), making real-time applications feasible. Layer-2 Blockchain
    Security Highly secure, relies on decentralized consensus mechanisms like proof-of-work or proof-of-stake. Inherits security from Layer-1 chains, ensuring secure settlements while processing transactions off-chain. Both (Security is shared)
    Energy Efficiency High energy consumption, especially for proof-of-work chains like Bitcoin, due to on-chain mining and validation. More energy-efficient by reducing the computational load on Layer-1 and processing fewer transactions directly. Layer-2 Blockchain
    Smart Contract Compatibility Supports smart contracts, but with limited scalability and higher costs for deploying decentralized applications (dApps). Fully compatible with smart contracts, enabling scalable and cost-effective dApp development. Layer-2 Blockchain
    Decentralization Full decentralization is maintained with all nodes participating in consensus. Maintains decentralization by periodically settling batches on Layer-1, but some may argue slight trade-offs exist. Layer-1 Blockchain
    Interoperability Limited interoperability, as most Layer-1 blockchains do not easily interact with other chains. Layer-2 solutions often offer interoperability, allowing assets and data to move seamlessly across multiple chains. Layer-2 Blockchain
    Use Cases Suitable for high-value, secure transactions like asset transfers, but struggles with high-throughput applications. Ideal for DeFi, gaming, NFTs, and micropayments, where high transaction throughput and low fees are critical. Layer-2 Blockchain

    4. The Criteria We Used To Shortlist Top Layer 2 Blockchain Solutions in 2024

    Our list of top Layer 2 Blockchain Solutions in 2024 was created with the following criteria in mind:

    Criteria Importance %
    Scalability 25%
    Transaction Costs 20%
    Security 15%
    Transaction Speed 15%
    Ecosystem Support & Adoption 10%
    Smart Contract Compatibility 5%
    Interoperability 5%
    Developer Tools & Resources 5%
    Energy Efficiency 5%

    4.1. Scalability (25%): 

    The solution's ability to significantly increase transaction throughput (TPS) compared to Layer-1 chains.

    4.2.  Transaction Costs (20%): 

    The reduction in gas fees and overall transaction costs offered by the Layer-2 solution.

    4.3. Security (15%): 

    How well the Layer-2 solution inherits or enhances the security of the underlying Layer-1 blockchain.

    4.4. Transaction Speed (15%): 

    The speed at which transactions are processed and confirmed, typically measured in seconds.

    4.5. Ecosystem Support & Adoption (10%): 

    The number of projects, decentralized applications (dApps), and users currently adopting the solution.

    4.6.  Smart Contract Compatibility (5%): 

    The ability to support complex smart contracts and decentralized applications seamlessly.

    4.7. Interoperability (5%): 

    How easily the solution allows cross-chain asset and data transfers between Layer-1 and other Layer-2 chains.

    4.8. Developer Tools & Resources (5%): 

    The availability of developer-friendly tools, SDKs, and APIs to support integration and innovation.

    4.9. Energy Efficiency (5%): 

    The solution's ability to minimize energy consumption compared to traditional Layer-1 blockchains.

    5. Brief Overview of Top Layer 2 Blockchain Solutions in 2024

    Based on our aforementioned criteria, we found the following Layer-2 blockchain solutions to be the most suitable and fitting picks for our list:

    Layer-2 Blockchain Solution Features
    Polygon - Fast Processing Time (2.1 seconds per block)
    - Low Transaction Fee ($0.01 per transaction)
    - Proof-of-Stake Consensus Mechanism
    Arbitrum - EVM-Compatibility
    - Seamless Ethereum Integration
    - Reduced Fee with Optimistic Rollups
    Avalanche Subnets - Independent Operations of Subnets
    - Decrease in Network Congestion
    - Cross-Chain Transfers
    Loopring - Supports Trading of ERC-20 tokens and NFTs
    - Powered by its own token ($LRC)
    - High Throughput (2000 TPS)
    OP Mainnet - EVM Compatibility
    - Support for Development Tools and Libraries
    - Superchain Capabilities (connecting multiple Layer-2 networks)

    6. Our Picks for the Top Layer 2 Blockchain Solutions in 2024

    Here, we will elaborate on our top picks and also explain why we chose them in the first place:

    6.1. Polygon

    Polygon, which was formerly known as MATIC, is the top-most ranking and leading Layer-2 blockchain protocol that was created to fix the scalability issues of Ethereum. The reason Polygon leads this list is because of its ease in handling transactions on a separate Ethereum-compatible blockchain, followed by returning those transactions back again to the main blockchain. This approach is responsible for significantly lowering the network load on Ethereum.

    In addition to this, Polygon is also renowned for allowing users to interact with any dApp on the blockchain network without any congestion issues.

    6.1.1. Standout Highlights of Polygon: Why We Chose It

    • Fast Processing Time: Polygon easily beats Ethereum when it comes to its block processing time of 2.1 seconds, which is much faster in comparison.

    • Low Transaction Fee: Polygon’s low transaction fee, a meagre amount of $0.01 per transaction, makes it a very popular and widely used choice of Layer 2 solution.

    • Proof-of-Stake Consensus Mechanism: For higher energy efficiency with a much faster turn-around time, Polygon utilizes a Proof-of-Stake consensus mechanism, as compared to Ethereum, which uses a Proof-of-Work consensus mechanism.

    6.2. Arbitrum

    Arbitrum is a popular choice of blockchain platform to overcome the scalability and congestion issues put forth by Ethereum. This layer-2 blockchain solution is designed with an optimistic roll-up technology where most transactions are processed off-chain, and only the transaction data and a roll-up of the summary are submitted to the Ethereum mainnet. It’s this feature that helps reduce Ethereum congestion, thereby allowing for more cost-efficient transactions.

    6.2.1. Standout Highlights of Arbitrum: Why We Chose It

    • EVM-Compatibility: Arbitrum is easily compatible with Ethereum virtual machines thanks to its optimistic rollups technology.

    • Seamless Ethereum Integration: Arbitrum is able to seamlessly integrate with existing tools and technologies powered by Ethereum to combine the power of its proprietary virtual machine with optimistic rollups.

    • Reduced Fee: Because of its support for efficient optimistic rollups technology, Arbitrum is able to cut transaction costs and platform fees down to just a tiny, minuscule fraction of costs generally incurred by Layer-1 blockchain solutions.

    6.3. Avalanche Subnets

    Avalanche is one of the most popular Blockchain networks currently in the market, and it has taken a leap forward into Layer-2 solutions with its central subnets, short for “subnetwork”, which is basically a set of nodes that work together to achieve a singular consensus on transactions that are linked to one or more blockchains. These subnets can also be considered as a network inside of a network, or rather, a network constructed on top of another network with an extensive infrastructure.

    This particular Layer-2 blockchain solution has the capability and potential to unlock a whole new door of possibilities in the Layer-2 blockchain space by giving users and developers on the network the power to build custom blockchains and empower Avalanche to scale.

    6.3.1. Standout Highlights of Avalanche: Why We Chose It

    • Independent Operations: Every subnet on the Avalanche network is able to operate independently, thereby facilitating a process of seamlessly integrating and adding new subnetworks on the blockchain.

    • Decrease in Network Congestion: The use of subnets is able to decrease the network congestion on the blockchain, which also helps in reducing transaction costs.

    • Cross-Chain Transfers: Users on the Avalanche blockchain are powered by an enormous amount of flexibility to tailor their individual subnet and engage in cross-chain transfers to other blockchains without interacting with the X-chain.

    6.4. Loopring

    Loopring, the first Ethereum zkRollup to exist on the blockchain, is a Layer-2 protocol built on Ethereum that enhances the overall transaction experience by processing key elements off-chain. By doing so, it significantly boosts Ethereum’s performance, enabling it to handle transactions at a rate 1,000 times faster than Ethereum's native throughput, with fees as low as a fraction of a cent. 

    Loopring’s primary goal is to address Ethereum’s scalability challenges through two innovative mechanisms: ring-based order matching and zkRollups. Ring-based order matching optimizes transactions by grouping multiple buy and sell orders into circular rings, ensuring efficient trade execution. Meanwhile, zkRollups help alleviate congestion on the Ethereum network by processing transactions off-chain and settling them on-chain in batches. These innovations make Loopring one of the most effective Layer-2 solutions for unlocking Ethereum’s potential.

    6.4.1. Standout Highlights of Loopring: Why We Chose It

    • Trading Support: Loopring’s platform supports the trading and exchange of different cryptocurrency tokens, including ERC-20 tokens and NFTs.

    • Individual Market Cap: Loopring is powered by its individual token, $LRC, which means that the platform is able to power its own market cap.

    • High Throughput: Loopring is able to harness over 2000 transactions per second (TPS), resulting in a massive throughput.

    6.5. OP Mainnet

    The OP Mainnet is a fast and cost-efficient Layer-2 blockchain for Ethereum, powered by Optimism. Developed by OP Labs and utilizing its proprietary OP Stack software, it has become one of the most widely-used Layer-2 solutions. As its name suggests, OP Mainnet leverages optimistic rollups—similar to its competitor Arbitrum—allowing for rapid transactions with minimal fees, all while preserving the robust security of Ethereum’s core architecture. 

    Additionally, like many other Layer-2 solutions, OP Mainnet is fully compatible with the Ethereum Virtual Machine (EVM), enabling seamless integration with Ethereum-based applications.

    6.5.1. Standout Features of OP Mainnet: Why We Chose It

    • EVM Compatibility: The most notable feature of OP Mainnet is its high-level of compatibility and support for EVM-powered blockchain wallets.

    • Miscellaneous Support Tools: Within the OP Mainnet system, there is a plethora of development tools, libraries, and modules available for helping developers.
    • Superchain Capabilities: OP Mainnet is also known for its superchain capabilities, as it is able to connect multiple Layer-2 networks on it through shared code.

    7. Comparing Our Picks for the Top Layer 2 Blockchain Solutions in 2024

    In this section, we will be drawing a comparison matrix between our chosen picks for the top layer 2 blockchain solutions in 2024 to help you decide which one you can opt for based on your industry requirements or preferences:

    Layer-2 Blockchain Solution Strengths Limitations Industry Use Cases
    Polygon - High transaction speed (up to 65,000 TPS)
    - Low fees ($0.01 per transaction)
    - Proof-of-Stake (PoS) mechanism
    - Dependent on its own validators, posing some centralization risks
    - Higher competition with other L2 solutions like Arbitrum and zk-Rollups
    - DeFi (Decentralized Finance)
    - NFTs
    - Gaming applications
    Arbitrum - High compatibility with Ethereum (EVM-compatible)
    - Optimistic Rollups for efficient scaling
    - Low transaction costs
    - Delays in transaction settlement due to fraud-proof mechanism
    - Some centralization risks with Arbitrum Nova
    - DeFi applications
    - Web3 gaming
    - NFT projects
    Avalanche Subnets - Highly scalable with subnets and parallel processing
    - Cross-chain compatibility
    - High TPS (4,500 TPS)
    - Higher entry requirements for validators (minimum 2,000 AVAX)
    - Limited adoption compared to Ethereum-based solutions
    - Custom blockchain creation
    - Enterprise applications
    - DeFi and cross-chain projects
    Loopring - High throughput (over 2,000 TPS)
    - zk-Rollups for low-cost and fast transactions
    - Focus on decentralized exchanges (DEXs)
    - Limited to Ethereum-based ecosystems
    - Lower adoption compared to broader L2 networks like Polygon and Arbitrum
    - Decentralized exchanges (DEXs)
    - Payment platforms
    - NFT trading
    OP Mainnet - High Ethereum compatibility (Optimistic Rollups)
    - Low fees and fast transactions
    - Superchain capabilities connecting multiple L2 networks
    - Potential delays due to fraud-proof mechanism
    - Less popular compared to Arbitrum and Polygon
    - DeFi
    - dApp development
    - Cross-chain scaling

    8. FAQs (Frequently Asked Questions)

    8.1. What is a Layer-2 Blockchain Solution?

    A Layer-2 blockchain solution is a secondary framework or protocol built on top of a Layer-1 blockchain (like Ethereum) to enhance scalability and efficiency. It reduces transaction congestion by processing transactions off the main chain, offering faster and cheaper transactions.

    8.2. What is the difference between Layer-1 and Layer-2 blockchain solutions?

    Layer-1 solutions refer to the base layer of a blockchain (e.g., Ethereum, Bitcoin), responsible for security and consensus. Layer-2 solutions are built on top of Layer-1, designed to improve scalability and reduce costs without compromising security by offloading the main chain’s transactional load​.

    8.3. What are the benefits of Layer-2 Blockchain Solutions?

    The key benefits include:

    • Increased scalability (handling more transactions per second)
    • Lower transaction fees
    • Faster transaction processing
    • Reduced load on Layer-1 blockchains, improving overall network efficiency

    8.4. What are some of the most popular Layer-2 Blockchain Solutions in 2024?

    Popular Layer-2 solutions in 2024 include:

    • Polygon (formerly Matic)
    • Arbitrum
    • OP Mainnet
    • Avalanche Subnets
    • Loopring

    8.5. What are the factors and criteria one must keep in mind when choosing a Layer-2 blockchain solution?

    Key factors include:

    • Transaction speed and fees
    • Security model (e.g., zk-Rollups vs. Optimistic Rollups)
    • Compatibility with Layer-1 protocols (e.g., Ethereum compatibility)
    • Decentralization and validator structure
    • Specific use cases such as DeFi, NFTs, or cross-chain transfers​

    8.6. What are some popular use cases for Layer-2 blockchain solutions?

    Popular use cases include:

    • DeFi (Decentralized Finance) applications
    • NFT trading and marketplaces
    • Gaming and metaverse projects
    • Cross-chain asset transfers
    • Enterprise-level blockchain solutions

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