What is Layer2? What are the leading Layer2 projects?

As the main chain network faces performance bottlenecks, Layer 2 (second-layer network) emerged at the historic moment, aiming to increase main chain throughput, reduce handling fees, and speed up transactions by transferring transaction processing off-chain. The advantages of Layer 2 include higher TPS, lower gas fees, faster speed and inherited main chain security. Common Layer 2 expansion solutions include state channels, side chains, Rollups and Plasma, and some leading projects include Optimism, Arbitrum, zkSync and StarkNet. Layer2 technology is still developing and is expected to further improve the performance and scalability of blockchain in the future. However, it should be noted that Layer 2 also has certain risks, such as financial security and technical risks, and caution should be exercised when using it.

What is Layer2? What are the leading projects of Layer2?

With the popularization of blockchain technology, main chain networks such as Ethereum are facing problems such as slow transaction speed, high handling fees, and poor scalability. Layer2 (Layer 2 network) emerged as an effective solution to these problems. This article will explain the concept of Layer2 and introduce some leading Layer2 projects.

What is Layer2?

Layer2 refers to a network built on the underlying blockchain (Layer1, such as Ethereum), aiming to improve the performance and scalability of the main chain while inheriting the security of the main chain. Layer2 transfers some transaction processing off-chain, thereby reducing the burden on the main chain, increasing transaction speed and reducing handling fees.

Advantages of Layer2:

• Higher transaction throughput (TPS): Layer2 can handle more transactions, thereby improving the network's Overall efficiency.

• Lower transaction fees (Gas fees): Since most transactions are processed off-chain, users can save Gas fees.

• Faster transaction speed: Off-chain transactions are processed faster, allowing users to complete transactions faster.

• Inherit the security of the main chain: The security of Layer2 depends on the underlying main chain, so it can inherit the security of the main chain.

Common Layer 2 expansion solutions:

• State Channels: such as Lightning Network, suitable for frequent of small transactions.

• Sidechains: have their own consensus mechanism and rules and can run independently of the main chain.

• Rollups: Package and submit transaction data to the main chain, with high security.

• Plasma: A Merkle tree-based expansion solution that can achieve higher throughput.

• Optimistic Rollups: Similar to Rollups, but using a fraud proof mechanism to further reduce costs.

• ZK-Rollups (zero-knowledge rollups): Using zero-knowledge proof technology, it can provide higher security and privacy.

Layer2 leading projects (examples, ranked in no particular order, and market conditions change at any time, please check the latest information yourself):

Optimistic Rollups:

• Arbitrum: A decentralized Optimistic Rollup platform, compatible with EVM and supporting a variety of DeFi applications.

• Optimism: Another popular Optimistic Rollup platform that is also EVM compatible and has an active community.

ZK-Rollups:

• zkSync: Uses zero-knowledge proof technology to provide higher security and privacy sex.

• StarkNet: A decentralized ZK-Rollup network that supports building and deploying dApps.

Others:

• Polygon: Originally a side chain, it now also supports multiple Layer 2 solutions.

• Immutable X: Layer 2 expansion solution focusing on NFT, providing fast and low-cost NFT transactions.

• Loopring: A decentralized trading platform based on ZK-Rollup.

The future of Layer2:

Layer2 technology is still developing, and more innovative expansion solutions may appear in the future. With the maturity and application of Layer 2 technology, it will greatly improve the performance and scalability of blockchain and promote the wider application of blockchain technology.

Risk reminder:

Although Layer2 technology can improve efficiency and reduce costs, there are also some risks, such as financial security risks, technical risks, etc. Please be sure to conduct sufficient research and operate with caution before using Layer2 projects. This article does not constitute investment advice, and any investment decisions should be based on your own risk tolerance and investment goals.

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