Layer 2 Solutions Leading Blockchain Scalability: 10 Projects Reshaping 2025

Understanding the Scalability Challenge in Blockchain

Bitcoin processes roughly 7 transactions per second (TPS), while Ethereum manages about 15 TPS on its base layer. Compare this to Visa’s 1,700 TPS capacity, and the throughput gap becomes evident. As blockchain adoption accelerates across DeFi, NFTs, gaming, and Web3 applications, this processing limitation creates a critical bottleneck. This scalability constraint sits at the heart of the blockchain trilemma—balancing speed, security, and decentralization.

What Layer 2 Networks Actually Do

Layer 2 systems are secondary protocols operating atop primary blockchains like Ethereum and Bitcoin. They handle transaction processing off the main chain, then settle batched transactions back to the Layer 1 network. This separation achieves three things: dramatically reduced network congestion, significantly lower transaction fees, and substantially increased throughput.

Think of it as a parallel processing system—while Layer 1 remains the immutable settlement layer, Layer 2 handles the daily transaction volume, freeing the main network from processing bottlenecks.

Core Benefits of Layer 2 Implementations

Transaction Cost Reduction: Layer 2 networks can cut transaction fees by 90-95%, making micro-transactions and frequent trading economically viable for everyday users.

Speed Improvements: Off-chain processing eliminates Layer 1 congestion. Transactions settle near-instantly rather than waiting for block confirmation.

DeFi and Gaming Expansion: Lower costs unlock new use cases—yield farming, NFT trading, and gaming economies become profitable at smaller transaction sizes.

Mainstream Adoption Path: Cost-effective transactions are essential for blockchain technology to compete with traditional financial systems.

Layer 1 vs Layer 2 vs Layer 3: The Scaling Stack

Layer 1 (Base Blockchain): The foundational network—Bitcoin, Ethereum. It handles consensus, security, and smart contract execution. Its strength is decentralization and security; its weakness is throughput.

Layer 2 (Secondary Networks): Processing layer built atop Layer 1. Transactions execute off-chain; settlements occur on Layer 1. This offers dramatic speed improvements and cost reductions while maintaining Layer 1’s security guarantees.

Layer 3 (Specialized Applications): Optimization layer for specific use cases. DeFi protocols, gaming platforms, or cross-chain applications can build custom Layer 3 solutions optimized for their particular needs.

Layer 2 Technology Categories

Optimistic Rollups: Fast Track Processing

Optimistic Rollups assume transaction validity by default, requiring fraud proofs only if transactions are challenged. This approach dramatically reduces computational overhead.

Advantages: Faster confirmation times, lower operational costs, proven security model Use Case: General-purpose scaling, suitable for most DeFi applications

Zero-Knowledge Rollups: Privacy Through Cryptography

ZK Rollups batch transactions into cryptographic proofs that verify validity without revealing individual transaction details. They bundle multiple transactions into a single mathematical proof.

Advantages: Enhanced privacy, minimal blockchain computational load, high throughput potential Drawback: More complex development and verification processes

Plasma Chains: Specialized Sidechains

Plasma operates as independent sidechains connected to the main network, each handling specific transaction types or applications.

Advantages: Exceptional speed and cost savings, specialized optimization Drawback: Different architecture from rollup-based solutions, requiring distinct infrastructure

Validium: Balancing Act

Validium processes transactions off-chain while maintaining security through cryptographic verification. It separates transaction execution from validation.

Advantages: Strong security assurance, high scalability, efficient throughput

Top Layer 2 Projects to Monitor

1. Arbitrum (ARB)

Current Price: $0.19
Market Cap: $1.08B
Throughput: 2,000-4,000 TPS
TVL: $10.7 billion
Technology: Optimistic Rollup

Arbitrum commands the largest market share among Ethereum Layer 2 networks, holding over 51% of TVL. Its Optimistic Rollup technology processes transactions 10 times faster than Ethereum mainnet while reducing gas costs by up to 95%.

The ecosystem supports diverse applications—DeFi protocols, NFT platforms, and gaming projects. ARB token holders participate in network governance, and the token also functions for transaction fees and staking.

Arbitrum’s strength lies in its developer-friendly infrastructure, active community, and continuous evolution. However, as a newer Layer 2 solution, it carries inherent risks compared to longer-established networks.

2. Optimism (OP)

Current Price: $0.26
Market Cap: $510.71M
Throughput: 2,000-4,000 TPS
TVL: $5.5 billion
Technology: Optimistic Rollup

Optimism delivers Ethereum’s security properties while addressing its scalability limitations. It processes transactions 26 times faster than Ethereum Layer 1 and reduces gas fees by approximately 90%.

The platform hosts numerous DeFi protocols, DAOs, and NFT marketplaces. It prioritizes community governance, with OP token holders directing network development. Its architecture leverages Ethereum’s security while operating independently for transaction processing.

Optimism represents a mature Layer 2 option with established infrastructure and a growing ecosystem, though it continues transitioning toward full decentralization.

3. Lightning Network (Bitcoin Layer 2)

Throughput: Up to 1 million TPS
TVL: $198 million
Technology: Bi-directional Payment Channels

The Lightning Network operates as Bitcoin’s primary Layer 2 solution, enabling near-instant, low-cost transactions through off-chain payment channels.

This architecture proves ideal for micropayments and everyday transactions while preserving Bitcoin’s security model. Users maintain sovereign control through private key management and can access various applications through the network.

The trade-off involves technical complexity for users and lower adoption rates compared to Bitcoin mainnet. However, for everyday Bitcoin usage and real-time payments, Lightning Network represents the practical solution.

4. Polygon (MATIC)

Throughput: 65,000 TPS
TVL: $4 billion
Market Cap: $7.5 billion
Technology: Mixed (zk Rollups and sidechains)

Polygon functions as a multichain ecosystem providing multiple scaling solutions for Ethereum. Its 65,000 TPS capacity significantly exceeds Ethereum mainnet throughput.

The ecosystem includes leading DeFi protocols (Aave, SushiSwap, Curve), major NFT marketplaces (OpenSea, Rarible), and innovative gaming platforms. MATIC token holders benefit from ecosystem growth through staking rewards and governance participation.

Polygon’s strength is its diverse technology stack and massive ecosystem adoption. Its comprehensive infrastructure makes it suitable for virtually any blockchain application.

5. Base Layer 2 Network

Throughput: 2,000 TPS
TVL: $729 million
Technology: Optimistic Rollup

Base represents a Layer 2 solution designed to enhance Ethereum’s capabilities through increased transaction speed and reduced fees. Utilizing Optimistic Rollup technology, it targets 95% fee reduction compared to Ethereum mainnet.

As a Layer 2 implementation, Base leverages Ethereum’s proven security model while processing transactions off-chain. The platform emphasizes developer accessibility through familiar tools and streamlined deployment processes.

Being in active development, Base continues expanding its ecosystem. Its focus on speed, affordability, and developer experience positions it as an emerging Layer 2 option worthy of attention.

6. Dymension (DYM)

Throughput: 20,000 TPS
TVL: 10.42 million DYM
Technology: RollApps with Modular Architecture

Dymension represents the first modular blockchain ecosystem within the Cosmos network, utilizing specialized RollApps (rollup applications) built on a secure settlement hub.

This modular design separates consensus, execution, and data availability functions, allowing each RollApp to optimize independently. Developers create customized RollApps tailored to specific application requirements, choosing appropriate mechanisms for their use cases.

The Inter-Blockchain Communication protocol enables cross-chain interoperability. While still under development, Dymension’s modular architecture offers flexibility for future-oriented developers.

7. Coti (COTI)

Current Price: $0.02
Market Cap: $54.39M
Throughput: 100,000 TPS
TVL: $28.98 million
Technology: Privacy-focused zk Rollup

Coti is transitioning from a standalone protocol to become a privacy-centric Layer 2 solution for Ethereum. This shift brings Cardano’s transaction capabilities to Ethereum while maintaining privacy features.

The network implements garbled circuits technology for transaction confidentiality. Transitioning from Directed Acyclic Graph consensus to EVM-compatible architecture, Coti targets privacy-first developers building confidential applications.

COTI tokens facilitate transaction fees, staking, governance, and merchant processing within the network.

8. Manta Network (MANTA)

Current Price: $0.07
Market Cap: $33.43M
Throughput: 4,000 TPS
TVL: $951 million
Technology: Privacy-focused zk Rollup

Manta Network specializes in privacy-preserving transactions for Ethereum. Its dual-module architecture includes Manta Pacific (EVM-compatible Layer 2) and Manta Atlantic (private identity management).

Zero-knowledge cryptography ensures transaction validity without compromising privacy. Manta provides Universal Circuits, enabling developers to build privacy-centric DeFi applications more easily.

The platform achieved rapid growth, becoming the third-largest Ethereum Layer 2 by TVL as of early 2024. MANTA tokens power network operations, gas fees, staking, and governance.

9. Starknet (STRK)

Throughput: 2,000-4,000 TPS (theoretical millions)
TVL: $164 million
Technology: STARK zero-knowledge proofs

Starknet employs STARK cryptography for off-chain transaction validation, offering theoretical throughput exceeding millions of TPS.

The network dramatically reduces transaction costs toward near-free everyday interactions. Cairo programming language and powerful developer tools create an accessible environment for building innovative applications.

Starknet commits to full decentralization and community governance. While cryptographic complexity may challenge newcomers, its technical foundation positions it for significant scaling potential.

10. Immutable X (IMX)

Current Price: $0.23
Market Cap: $191.87M
Throughput: 9,000 TPS
TVL: $169 million
Technology: Validium (ZK-Rollups variant)

Immutable X specializes as a gaming-focused Layer 2, delivering scalability specifically designed for gaming, NFTs, and Web3 experiences.

The network supports over 4,000 TPS with near-instant confirmations and minimal fees. It efficiently handles NFT minting, trading, and transfers at scale while maintaining Ethereum mainnet security.

Developers benefit from low costs, accessible tools, and a gaming-focused community. IMX tokens facilitate network operations, staking, and governance participation.

Ethereum 2.0 and Layer 2 Synergies

Ethereum 2.0 upgrades, particularly Danksharding and Proto-Danksharding phases, fundamentally enhance Layer 2 efficiency. Proto-Danksharding slashes Layer 2 transaction fees, improving sequencer support and enabling tighter Layer 1-Layer 2 integration.

These upgrades don’t replace Layer 2 solutions; they create complementary relationships. Layer 2 networks continue scaling applications while Ethereum 2.0 provides increasingly efficient settlement layers.

The combination delivers:

• Dramatically reduced transaction costs across networks
• Faster confirmation times for improved user experience
• Enhanced throughput supporting mainstream adoption
• Frictionless integration between applications and settlement layers

The Layer 2 Evolution Continues

Layer 2 networks have become essential infrastructure for blockchain viability. By reducing costs, improving speed, and enhancing scalability, these solutions address the core limitations preventing mainstream blockchain adoption.

In 2025, Layer 2 represents more than technological innovation—it’s the practical foundation enabling decentralized applications to compete with traditional systems. From Ethereum Layer 2 ecosystems to Bitcoin’s Lightning Network, these networks are actively reshaping how blockchain technology serves real-world use cases.

The convergence of improved Layer 2 technologies, Ethereum 2.0 enhancements, and expanding ecosystems signals that blockchain scalability challenges are transitioning from theoretical problems to solved engineering challenges.