Layer-2 Solutions That Could Define Blockchain in 2025

The blockchain industry faces a fundamental challenge: speed versus decentralization. While Bitcoin processes around 7 transactions per second and Ethereum’s base layer handles roughly 15 TPS, Visa manages approximately 1,700 TPS. This throughput gap has driven the emergence of Layer-2 networks—secondary protocols that sit on top of foundational blockchains to dramatically improve transaction velocity and reduce costs.

Understanding Layer-2 Networks

L2 network solutions operate through off-chain transaction processing, batching multiple transactions into consolidated updates submitted to the main chain. Think of it as a bypass system: instead of every transaction clogging the highway, smaller roads handle the volume separately, then sync back to the main route.

This architecture delivers three critical improvements:

Speed & Affordability: By moving computation off-chain, Layer-2 networks can achieve thousands of TPS while cutting gas fees by 90-95% compared to Layer-1 operations.

DeFi & dApp Enablement: Lower costs make yield farming, NFT trading, and decentralized applications economically viable for everyday users, not just whale investors.

Mass Adoption Gateway: User-friendly transactions and minimal fees are essential for blockchain technology to move beyond crypto enthusiasts into mainstream markets.

The Technology Stack: Three Approaches

Optimistic Rollups assume transactions are valid by default, only investigating disputes when challenged. This “guilty until proven innocent” model trades some verification speed for operational efficiency. Arbitrum and Optimism lead this category.

Zero-Knowledge Rollups bundle transactions into cryptographic proofs that validate transactions while keeping data private. This privacy-first approach powers Manta Network and others seeking confidentiality alongside scalability.

Validium & Sidechains move validation off-chain while maintaining security guarantees, useful for gaming and NFT-heavy applications. Immutable X (IMX) specializes in this space, processing over 9,000 TPS for Web3 gaming.

Leading Layer-2 Projects: Where the Action Is

Arbitrum: The Market Leader

• Price: $0.19 | Market Cap: $1.07B
• TPS: 2,000-4,000 | Technology: Optimistic Rollup

Arbitrum commands over 51% of Layer-2 TVL, processing transactions 10x faster than Ethereum mainnet. The ARB token governs the network and secures the system through staking. Its thriving ecosystem includes major DeFi protocols, gaming platforms, and NFT marketplaces. The strong developer community continues expanding use cases, though newer entrants like Manta Network are challenging its dominance.

Optimism: Security-First Scaling

• Price: $0.26 | Market Cap: $505.85M
• TPS: 2,000-4,000 | Technology: Optimistic Rollup

Optimism prioritizes Ethereum security inheritance while delivering 26x faster transactions and 90% lower gas fees. The OP token enables network governance and incentivizes community participation. Its commitment to decentralization and open development attracts serious builders. Transaction costs remain slightly higher than competitors, but the security-first philosophy appeals to risk-conscious projects.

Lightning Network: Bitcoin’s Speed Layer

• TPS: Up to 1,000,000 | TVL: $198M+
• Technology: Bi-directional payment channels

Bitcoin’s most mature scaling solution, Lightning Network enables instant micro-transactions at near-zero cost by operating entirely off-chain. Perfect for everyday payments and real-time applications, it demonstrates that Layer-2 thinking predates Ethereum. However, technical complexity limits mainstream adoption.

Polygon: The Multichain Swiss Army Knife

• TPS: 65,000+ | TVL: $4B
• Technology: Multiple (zk Rollups, sidechains, Proof-of-Stake)

Polygon’s ecosystem approach offers multiple scaling tools rather than betting on a single technology. The MATIC token powers gas fees and governance. Its 845M+ DeFi TVL and integration with major protocols like Aave and Curve make it the go-to for DeFi builders. The modular design means developers choose the right scaling solution for their specific needs.

Manta Network: Privacy Meets Speed

• Price: $0.07 | Market Cap: $33.29M
• TPS: 4,000 | Technology: zk Rollup

Privacy enthusiasts are flocking to Manta Network, which combines efficient transactions with confidential smart contracts. It recently vaulted past Base to become Ethereum’s third-largest Layer-2 by TVL, proving market appetite for privacy-centric scaling. The MANTA token fuels the network and governance participation. For DeFi users prioritizing transaction confidentiality, Manta offers a unique value proposition.

Immutable X: Gaming’s Layer-2

• Price: $0.23 | Market Cap: $190.14M
• TPS: 9,000+ | Technology: Validium

Immutable X specializes in the gaming vertical, offering NFT-focused infrastructure with 9,000+ TPS capacity. The IMX token covers network operations and governance. Its throughput and low fees make NFT minting and trading economically feasible at scale. The ecosystem includes major gaming platforms and marketplaces built specifically for Web3 game interoperability.

Coti: Transitioning to Ethereum

• Price: $0.02 | Market Cap: $54.11M
• TPS: 100,000 | Technology: zk Rollup (migrating)

Originally built for Cardano, Coti is transitioning to become Ethereum’s privacy-focused Layer-2. Its garbled circuits technology protects transaction data while enabling EVM compatibility. The COTI token migration to the new L2 network is underway. This shift positions Coti as a bridge between privacy-first architecture and Ethereum’s massive liquidity.

Starknet: Extreme Throughput Pioneer

• TPS: 2,000-4,000 (theoretical millions) | TVL: $164M
• Technology: zk Rollup (STARK proofs)

Starknet uses the latest cryptographic proofs (STARKs) to validate millions of transactions theoretically per second. Its Cairo programming language offers powerful tools for developers building innovative dApps. Near-free transactions make it ideal for experimentation. The tradeoff is technical complexity—easier for experienced developers, steeper for newcomers.

Base: Coinbase’s Layer-2 Play

• TPS: 2,000 | TVL: $729M
• Technology: Optimistic Rollup

Coinbase’s Base layer-2 brings institutional backing and user base to Ethereum scaling. Using OP Stack technology, it targets 2,000 TPS with Ethereum-level security. Base benefits from Coinbase’s security expertise and integration with institutional onramps. Still in growth phase, but backed by one of crypto’s most recognized brands.

Dymension: Modular Rollup Approach

• TPS: 20,000 | TVL: 10.42M DYM tokens
• Technology: RollApps (modular design)

Dymension takes a radically different approach: instead of one monolithic Layer-2, it’s an ecosystem of specialized RollApps, each optimized for specific use cases. This modularity means developers can customize consensus, smart contracts, and data availability. Cross-chain communication via IBC protocol adds interoperability with the Cosmos ecosystem.

Comparing Layer Strategies

Choosing the right Layer-2 depends on your priorities:

Need maximum decentralization with proven security? Arbitrum and Optimism lead through community governance and longer track records.

Prioritizing absolute speed and lowest costs? Polygon’s 65,000 TPS and Dymension’s modular approach outpace competitors, though with different trade-offs.

Want privacy protection alongside scaling? Manta Network and Coti offer confidentiality that other Layer-2s don’t provide.

Building gaming or NFT infrastructure? Immutable X’s specialization and 9,000+ TPS make it the obvious choice.

The Ethereum 2.0 Factor

Ethereum’s upcoming Danksharding upgrade will increase base-layer throughput to approximately 100,000 TPS. This doesn’t eliminate Layer-2 solutions—instead, it amplifies them. Proto-Danksharding makes Layer-2 networks cheaper to operate, as their data costs plummet. The result: a symbiotic relationship where Ethereum 2.0 and L2 networks work together rather than competing, creating a truly scalable ecosystem.

This complementary relationship means Layer-2 solutions will remain essential even as Ethereum improves, but the cost advantages will make them even more attractive.

Why Layer-2 Matters Now

Layer-2 networks aren’t just technical improvements—they’re adoption catalysts. Transactions that cost $50 on Ethereum become $0.50 on Arbitrum. NFT trades that require $100 in gas become economical on Immutable X. DeFi strategies that were only profitable for large positions become viable for retail users.

The 10 projects highlighted above represent different visions for blockchain’s future. Some prioritize security through Ethereum inheritance, others pursue extreme throughput, and still others specialize in privacy or gaming. Together, they’re solving the scalability puzzle that threatened blockchain’s mainstream potential.

As 2025 unfolds, Layer-2 networks will likely account for the majority of on-chain transaction volume. The question isn’t whether to use Layer-2—it’s which one fits your specific use case.