Polygon (formerly Matic) is a Layer 2 solution powering Ethereum scaling and infrastructure development. The great thing about Polygon is that it's already used by many projects like Sushiswap, Aavegotchi, Chain Games, Quickswap etc.

It offers scalable and instantaneous transactions. Each Polygon sidechain can theoretically achieve 2^16 transactions per block. The protocol has achieved up to 7,000 TPS on a single sidechain on an internal testnet.

This is significantly higher than the 14 transactions per second Ethereum mainnet itself can achieve. Polygon's token MATIC token is now listed on Coinbase. Therefore, it's the first entry in our top 5 Ethereum layer 2 projects list.

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This Layer 2 scaling solution for the Ethereum network features a payment/transfer facility and decentralized exchange (DEX). LRC is the native token. The team has developed zkRollups, which is used to power the Loopring exchange.

Using the Loopring Pay facility, users can send and receive Ethereum (ETH) or Ethereum based assets, instantly and for free. The zkRollup scales Ethereum 1000x over its nominal capacity by transferring most processing on another chain.

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OMG Network is a Plasma-based Layer 2 scaling solution, which scales the Ethereum blockchain to thousands of TPS. It reduces the fees by an estimated 1/3rd, compared to before, all while maintaining Ethereum’s security.

OMG Network does so by transferring the processing of the transaction outside the Ethereum mainnet, using it only for the final settlement. Further, it batches the transactions, making the process more efficient and less resource-intensive.

The native token is OMG. This scaling solution is fast, trustless, oriented for borderless financial services, instantly settled, low fees, and enterprise-grade.

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SKALE network is an open-source security and execution Ethereum Layer 2 scaling solution, which relies on elastic side chains to divert processing off the mainnet.

It consists of high-performance side chains executing sub-second block times, running up to 2,000 TPS per chain. Skale can support full-state smart contracts, decentralized storage, execute Rollups, and machine learning in EVM.

They offer speed/functionality without compromising security or decentralization. It can support thousand of thousands of independent blockchains of all subtypes.

It has full compatibility with Solidity and thus the Ethereum ecosystem. It is a collusion-resistant leaderless network with mathematically provable secure ABBA-based consensus.

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The ZKSwap is a Layer 2 scaling solution, specifically an automated market maker (AMM) type decentralized exchange (DEX) powered by zkRollup technology. Developed by L2Lab, it has already launched on Ethereum mainnet.

It transfers all tokens to Layer 2 and guarantees consistency by continuously generating zero-knowledge proofs. It allows exchanges to execute swaps with zero gas fees and unlimited scalability.

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It's a hugely lucrative market. Considering that the Ethereum block space is the most expensive and the scaling demand is at all-time high. It means that L2 projects are going to have a field day ahead with the increasing integrations and maturity of infrastructure around them.

The Layer 2 scaling solutions are decentralized protocols that increase the processing capacity of a blockchain (hence scaling) and as a result, relieve congestion on the network.

They work by delegating the network processing “off-chain” to their own chain, processing it there, before settling the final balances on the base layer mainnet.