What are layer 2 protocols?

Layer 2 protocols are off-chain solutions responsible for improving scalability and minimizing transaction costs while running on top of the Layer 1s, like Ethereum. They are also responsible for providing security to Layer 1.

TYPES OF layer 2 protocols

#1 State Channels Instant P2P Ethereum transactions are made possible. #2 Plasma Combines Merkle trees and smart contracts to generate infinite sidechains. #3 Rollups Enhances security while minimizing centralization

Top 5 Ethereum Layer 2 Crypto Projects

#1 POLYGON

Polygon is a layer-2 blockchain protocol that facilitates interchain scalability and adaptability. It is popular because of the low gas fees and high transaction throughput it provides developers.

#2 ARBITRUM

Arbitrum aims to alleviate Ethereum’s congestion by offering 40,000 TPS at a very low price. Rollups are used to validate the smart contracts on Arbitrum. Its EVM compatibility makes it unique.

#3 LOOPRING

Layer 2 scaling protocol, Loopring, facilitates non-custodial order book-based DEXs and payment methods. It can runs more than 2,000 TPS while keeping the same degree of security as Ethereum.

For the complete list of ETHEREUM layer 2 projects, read the blog on wazirx.