What Are Layer 2s?
Layer 2 solutions, such as those built on top of the Ethereum blockchain, aim to enhance scalability while maintaining Layer 1’s security and decentralization standards. The primary benefits of improved scalability include significantly faster and cheaper transactions.
The top 5 Layer 2 tokens by market capitalization, according to recent data from CoinGecko, are Polygon ($MATIC), ImmutableX ($IMX), Arbitrum ($ARB), Optimism ($OP), and Mantle ($MNT).
Most native Layer 2 tokens serve various purposes, including paying transaction fees and staking, but primarily focus on governance.
Polygon ($MATIC)
Formerly known as the Matic Network, Polygon is the layer 2 solution with the highest market capitalization, currently ranking 15th in market cap. It is dedicated to Ethereum scaling and infrastructure development, enabling the creation of Optimistic Rollup chains, ZK Rollup chains, stand-alone chains, or any other required infrastructure by developers.
Project Website: https://polygon.technology
ImmutableX ($IMX)
Immutable X is a Layer 2 scaling solution designed for NFTs and gaming projects on the Ethereum Blockchain. Over 200 projects are currently building on ImmutableX, offering zero gas fees and the ability to process up to 9000 transactions per second.
Project Website: https://imx.community
Optimism ($OP)
Ranked at number 3, the Optimism Network is a digital democratic governance experiment conducted on a large scale. Optimism is developed as a simple extension to the existing Ethereum software, enabling Ethereum apps to scale and function at a significantly lower cost with its EVM-equivalent architecture.
Project Website: https://app.optimism.io
Arbitrum ($ARB)
Arbitrum is a roll-up chain designed to enhance Ethereum’s scalability by consolidating multiple transactions into a single transaction, thereby reducing the load on the Ethereum network.
Project Website: https://arbitrum.io
Mantle ($MNT)
Mantle Network, another notable Layer-2 scaling solution, is Ethereum Virtual Machine (EVM)-compatible and utilizes Optimistic rollups to facilitate fast and cost-effective transactions. Transactions are executed off-chain but settled on-chain.
Project Website: https://www.mantle.xyz
In Conclusion
These are the top 5 Layer 2 tokens by market capitalization, with CoinGecko listing more than 20 Layer 2 tokens in total.