• Written by: Dennis Weidner
  • Mon, 25 Jul 2022
  •   Germany

Ethereum based Layer 2 solutions are all the rage, how can you invest in this lucrative market? What are the top 5 Ethereum Layer 2 projects?

Top 5 Ethereum Layer 2 Projects For Lucrative Investments in 2022

#1 Polygon (MATIC) – $6.6B Market Cap

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.

#2 Loopring (LRC) – $514M Market Cap

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.

#3 OMG Network (OMG) – $276.8M Market Cap

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.

#4 Skale (SKL) – $184.6M Market Cap

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.

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.

#5 ZKSwap (ZKS) – $11.6M Market Cap

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.

Why Top 5 Ethereum Layer 2 Projects Will Likely Rise?

About Layer 2 Solutions

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.