Which Ethereum Layer 2 Solutions Are the Most Effective?
Ethereum hosts thousands of Dapps as the second most popular blockchain network. However, as the network expands, it has run some issues, the most serious of which being scalability and high gas prices. There is a demand for greater computing power because ETH is used by thousands of Dapps.
Layer-2 solutions, which are basically networks that reduce transaction traffic from the primary chain by providing alternate compute chains, were born out of the necessity for extra resources.
This article examines the top five Ethereum layer 2 solutions
Polygon, formerly known as the Matic network, was launched in 2017 with the goal of increasing Ethereum’s TPS to over 7000 TPS. Polygon has processed over a billion transactions and has over 2.7 million monthly active users, according to CNBC. Polygon has lower gas prices than ETH due to its high TPS. To provide optimal services, Polygon has created relationships with several projects such as Graphlink, Umbrella Network, Kambria Open Innovation, and Mogul Productions. This layer-2 solution is used by popular applications such as Sushiswap, Chain Games, Quickswap, and Aavegotchi.
The Arbitrum Optimistic Rollup network was established in mid-2021 and quickly gained traction, with over 280k addresses engaging with it by November 2021. It has already processed over 14 million transactions and can scale the Ethereum chain by roughly 40k TPS. The main chain of Ethereum is used to verify transactions in Arbitrum. As a result, gas prices are greater than those of many other layer-2 solutions, but slightly lower than those of the Ethereum main chain.
In order to achieve maximum scalability, it collaborates with projects such as Chainlink, Graph Protocol, OKEx, and many more. According to recent sources, UniSwap, the world’s largest DEX, just passed a governance vote to employ Arbitrum’s layer-2 solutions. To connect to Ethereum, the solution uses an EthBridge.
The Loopring ZK-Rollup, which was launched in March 2020, focuses on decentralized exchanges. Loopring is capable of a 1000x layer 1 throughput. Loopring, for example, can presently process roughly 2025 transactions per second.
According to some claims, Looprings gas expenses are 100 times lower than Ethereum layer-1 fees. Loopring maintains constant high liquidity for its coin by employing 16 order rings. When Loopring’s native token, LRC, first went on the market in 2017, it was worth $0.13. It reached an all-time high of $3.37 in late 2021. LRC is currently selling at roughly $0.5, and experts anticipate that by 2026, it will be worth around $1.7.
Another Optimistic Rollup, Optimism, is one of the best Ethereum Layer 2 solutions available today. The Alpha mainnet of Optimism went up in January 2021, and since then, it has had a tremendous amount of traffic. According to reports, Optimism can handle over 2k transactions per second while saving a lot of money on gas. For example, the Optimism website claimed that investors had saved $1 billion in gas costs since its launch.
Optimism created a native token called Op, which has a currency valuation of $1.36, as an investment on June 1st, 2022. The all-time high for the token was roughly $4.6 shortly after its debut on June 1st. However, it has since plunged, owing to the pessimistic nature of the crypto markets.
Immutable X, an NFT-focused Ethereum scaling solution, must be included in our list of the finest Ethereum Layer 2 solutions. Immutable X, which was launched in 2018, focuses primarily on non-fungible tokens, allowing holders to transmit them from one wallet to another with lower gas expenses. This network is sometimes referred to as a zero-gas scalability solution.
According to reports, this network has a throughput of up to 9k TPS, making it the greatest layer-2 solution for NFTs. Immutable X features its own native token, IMX, which has recently done admirably in the market. In mid-2021, the token debuted on the market with a price of $0.000000000001. IMX was trading at $0.93 at the time of writing this report. In November 2021, IMX’s all-time high will be around $9.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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