Top 5 Layer 2 Protocols for Ethereum Scaling

Learning the five best layer 2 (L2) protocols is a great way to enhance your understanding of how decentralized networks scale. Second-layer protocols serve several roles in the decentralized economy, with their primary purpose being to alleviate congestion issues.

Since these off-chain protocols started to emerge in 2018, there has been a steady flow of options entering the market. These scaling solutions continue to evolve, with many offering unique features that make them ideal for certain use case scenarios.

There are many different types of layer 2 protocols in operation today, and depending on your particular goal, one is better suited to the task than the others. These systems provide a separate layer that can handle both smart contract executions and transaction processing, significantly reducing Ethereum (ETH +3.92%) congestion.

Popular Layer-2 Consensus Mechanisms

• Optimistic Rollups – Optimistic Rollups speed up transaction times by assuming all batched transactions are valid. Transactions get combined via the “rollup” technology, reducing mainnet congestion. These systems include a challenge period, which enables the network to dispute incorrect transaction data without slowing the network down.
• Zero-knowledge Rollups – ZK rollup technology is another popular scaling solution found in the L2 sector. These networks borrow the scalability of optimistic rollups and combine it with an advanced privacy algorithm. Zero-knowledge transactions don’t require the users to exchange any identifying data directly.
• Plasma Chains – Plasma chains act as parallel networks that sit on top of the Ethereum blockchain. They are unique in several ways, including that they operate via an ERC-20 contract on the Ethereum blockchain.

When seeking out a reliable and safe L2 solution, you need to examine what your investment goals are and what key features you desire most. Today’s networks come in all shapes and sizes, with many designed specifically for certain applications or tasks.

So, without further ado, let’s check out the best options available!

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1. Arbitrum One (ARB +4.78%)

Best All-Rounder & Market Leader

Arbitrum One is a leading L2 scaling solution that entered the market in August 2021. It was founded by Ed Felten, Steven Goldfeder, and Harry Kalodner from Offchain Labs. The platform serves as a scaling solution for EVM-powered dapps. It offers superior speed and lower transaction fees than the Ethereum mainnet.

Source – Arbitrum One

Arbitrum One’s performance comes from several key factors. For one, it leverages optimistic rollup technology to improve performance. The network assumes all transactions are valid and provides a dispute time for each one to be challenged if necessary, providing faster finality.

The BoLD upgrade pushed Arbitrum’s capabilities further, enabling permissionless validation for Arbitrum chains. This protocol increased censorship resistance and improved the network’s protection against delay attacks.

Arbitrum One is governed by the ArbitrumDAO. Users can control the network’s trajectory and key offerings using this voting mechanism. As such, Arbitrum One is known for its transparency and decentralized approach to L2 solutions.

This layer 2 layer protocol provides low fees and lightning-fast finality. Specifically, you will pay around $0.09 per transaction. Swaps can cost a little more, at around $0.27, which is still far less than the Ethereum mainnet.

Arbitrum One currently dominates the layer 2 space in terms of Total Value Stored. It currently has $19.50B in TVS. Additionally, it’s home to +400 Dapps. These factors helped Arbitrum One top the list for the layer 2 protocols you need to know.

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2. Base (BASE +1.94%)

Best Coinbase-Integrated L2

North America’s largest centralized exchange, Coinbase, created Base after seeing the disruption Ethereum congestion caused to users. The protocols concept first emerged in February 2023, with the mainnet launching in August of the same year.

Base is a high-performance second-layer protocol that was built specifically to assist the Ethereum development community. This highly anticipated layer 2 solution launched with 100 dapps and strong support from developers and traders alike.

Source – Base

Base uses rollup technology to provide high performance and reduce congestion on the Ethereum mainnet. It benefited greatly from Coinbase’s extensive resources and expertise. Developers were able to combine Coinbase’s network with advanced scaling technologies to ensure that Base users got straightforward and reliable service.

As an ERC-compatible scaling solution, Base provides an easy way for Ethereum developers to port their dapps over without having to recode. This streamlined approach has paid off greatly as more platforms migrate to Base to leverage its financial stability and market positioning.

Notably, Base Chain integrates an OP Stack fault-proof system designed to streamline the deployment of secure dapps. This system was created in conjunction with Optimism.

Base is also part of the OP mainnet Superchain ecosystem. This interoperability enables it to leverage powerful features such as fault-proofing. These options enable users to validate withdrawals across bridged transactions.

Notably, BASE is the utility token for the second-layer network. It’s required to access key features like paying fees and executing smart contracts.

Base ranks 2nd in terms of TVS with $15.67B in assets. Much of its success can be attributed to a combination of easy integration and access to the greater Coinbase ecosystem. Impressively, this ecosystem now includes +110M verified users and +$80B in assets.

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3. OP Mainnet (Optimism) (OP +5.46%)

Best Modular Rollup Ecosystem

Op Mainnet launched in 2019 and was founded by the Plasma Group. It operates as a high-performance Layer 2 blockchain designed to support DeFi platforms, NFTs, gaming, and Web3 actions.

The scaling solution entered the market in January 2021 after 2 years in development. From the gate, it outperformed competitors using optimistic rollup technology and a proprietary OP stack.

Notably, OP Mainnet was one of the first roll-up layer 2 layer protocols to be fully EVM compatible. It offers developers a modular design that shortens programming times and improves security by eliminating simple coding errors and repetitive tasks.

The OP Mainnet Superchain concept revolves around the idea of connecting the growing number of L2s in an organized manner. These OP stack rollups are crucial to the Ethereum scaling strategy, enabling more dapps, tokens, and DeFi applications.

Optimism simplifies development with auditable code and full transparency. Users can integrate fraud detection measures and other features to increase network safety further. It even offers permissionless fault proofs that help to ensure validity.

The OP Maintenance fault-proof system is a true multi-proof system where the code is compiled on-chain via a one-step executor. This structure provides a simplified, minimal VM to conduct certain transactions with less network congestion.

Keenly, Optimism offers a low fee structure. Typical fees can range from approximately $0.09 per transfer. Swaps will cost $0.18, making OP Mainnet very competitive when compared to other options.

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4. ZKsync Era (ZK +5.29%)

Best Privacy-Preserving Rollup

Zksync Era launched in 2023 as Zksync to provide scalability from a developer-friendly environment. The network leverages zero-knowledge technology to provide security, privacy, and performance for users.

Zksync was founded by Matter Labs. It features full EVM compatibility, alongside easy onboarding and split-second finality. Developers can port their Ethereum projects over with no recoding, which is another reason the network managed to secure +$1.25B in TVS.

Source – ZKsync

The network’s Boojum upgrade transitioned the ecosystem to an enterprise-grade L2 solution. It streamlined the creation and use of hash functions, lookup tables, curves, and other core programming tasks. Zksync Era also enables developers to write in Solidity, Vyper, and other ERC-compatible languages.

The Boojum upgrade converted the network to a hybrid STARK/SNARK proof-powered ecosystem. It improved efficiency by introducing Goldilocks fields to enhance computational capabilities. These technical additions were accompanied by lower fees of $0.07 per transfer following the upgrade.

The ZK token grants holders voting rights within the community governance system. They can choose to put forth proposals or delegate their voting power to others. The ZK token is also used to cover network fees and power smart contract executions.

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5. Starknet (STRK +3.03%)

Best Quantum-Resistant L2

Starknet entered the market in 2018 as a decentralized L2 scaling solution geared towards developers. The platform’s founders,  Michael Riabzev, Uri Kolodny, Alessandro Chiesa, and Eli Ben-Sasson, are also the founders of StarkWare Industries Ltd. They sought to scale Ethereum and Bitcoin using a new privacy protocol called ZK-STARKs, which improves upon previous rollup solutions.

Some of the main advantages that ZK-STARKS bring to the market are that they rely on public randomness protocols rather than setup procedures, which can lead to centralization in some networks.

Source – Starknet

Additionally, the technology was built to remain secure, even from quantum computer attacks. This protection was achieved by leveraging a hash functionality instead of the typical cryptography found in competitors’ options.

Starknet offers a developer-friendly environment that enables creators to effortlessly port over their Ethereum dapps. It can support the latest DeFi, NFT, and gaming protocols available today. It’s also one of the few layer 2-layer protocols designed to support decentralized AI applications.

Keenly, Starknet utilizes the popular Cairo programming language, which has helped it to further its developer ecosystem. Programmers can leverage the SN stack to create decentralized platforms that offer security and performance.

Additionally, Starknet can handle heavy congestion using its modular architecture that separates transaction execution, data availability, and fidelity. The network also leverages additional technologies such as integrated parallel execution and block packing to increase performance further.

Another unique feature of Starknet is its Smart Accounts. Every account features customizable transaction logic, enabling you to add security in the form of multisignature verification and more. These wallets eliminate manual transaction signing, bringing users closer to a traditional transaction feel.

STRK is how users pay for transactions, smart contract executions, and gain voting rights within the economy. Users can stake their STRK tokens or use them to incentivize dapp users to engage and participate in network activities and tasks.

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Conclusion

Now that you have a firm understanding of the top layer-2 protocols, you’re better suited to make informed decisions on which one best fits your plans. Remember to consider your overall goals, what cryptocurrencies you expect to utilize, and where you intend to take your strategy in the future to avoid wasting time with subpar L2 solutions.

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Methodology

To select the top layer-2 protocols, we evaluated networks based on adoption, security, cost, and ecosystem health.

1. Adoption – Measured by users, transactions, and total value secured (TVS). This carried the most weight.
2. Security – Proofs live on-chain, bridge design, and history of incidents. Networks without live proofs had capped scores.
3. Cost & Speed – Typical fees and average time to finality (using 90-day medians to smooth spikes).
4. Decentralization – Governance model, sequencer control, and upgrade transparency.
5. Ecosystem & UX – Depth of apps, tooling, wallet/on-ramp support, and developer friendliness.

While TVS is an important indicator, rankings also balance adoption with security maturity, decentralization, and ecosystem health to ensure that networks with artificially inflated value do not outrank those with stronger fundamentals.

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