Cryptocurrencies often struggle with what we know as the Blockchain trilemma. The Blockchain
trilemma is usually used when a particular blockchain needs to sacrifice one of three
features, scalability, decentralisation, and security, for efficient functioning.
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Layer 2 solutions aim to ensure that its scaling solution enables a higher throughput ratio
to smoothen the transactions without compromising on the security of the underlying blockchain on
which it is built. As they are built on top of the Layer 1 blockchain, the Layer 2 cryptos tend to
improve on the features that Layer 1 possesses in a bid to enhance the efficiency of the networks.
Today, many popular cryptos exist on the Layer 2 platform that offers various services because
of their higher throughput ratio. We have picked 5 Layer 2 cryptos
and explained why they stand out from others. Optimism (OP)
Optimism (OP) crypto is primarily a community-focused Layer 2 crypto that boasts
features such as lighting speed at a lower cost to transmit data from one blockchain to another.
Optimism crypto offers features such as condensing and processing large batch of transactions.
The Optimism ecosystem allows multiple apps such as Defi, NFTs,
Bridges to coexist on the single platform. Founded by the Optimism Foundation, the OP crypto offers
long-term sustainability by not taking shortcuts. The Optimism crypto on 6 June was not having
a good day in office as it was down by 1.30%. OP crypto was trading at US$0.527181
with a volume of US$3,66,28,209 on 6 June, according to CoinMarketCap.
Uniswap (UNI) Uniswap is an Ethereum-powered decentralised
crypto trading protocol that supports numerous Defi applications and boasts features, such as
token swapping, staking, voting, etc. As a Layer 2 token, the users can use the Uniswap app to swap
Defi tokens and trade them with other tokens in the same basket, such as Polygon, Optimism, etc.
Uniswap targets resolving issues related to liquidity with automated solutions, an issue that
has plagued the DEXs. The UNI protocol reduces risks and costs by automating the market-making
process, thereby removing user identity This helps its users to create a liquidity pool with any pair
of tokens. requirements. This helps its users to create a liquidity pool with any pair of tokens.
On 6 June, UNI crypto witnessed an upswing as it was up by 2.92% and was trading at US$5.39 with a
24-hour trading volume of US$13,69,80,332. Loopring (LRC)
Loopring is primarily an Ethereum Layer 2 protocol that offers low fees and higher
transaction speed various activities. Loopring’s primary objective is to combine centralised order
matching with decentralised-blockchain order settlement into a hybrid product that will take
the best of both worlds of centralised and DEX. This way, the protocol eliminates the
inefficiencies and only takes up the advantages that the protocol brings to the platform. LRC
crypto on 6 June was seen trading at US$0.407256 with a volume of US$7,43,23,002 over a day.
OMG Network (OMG) OMG Network is another Layer
2 crypto that focuses on reducing gas fees and improving the transaction throughput for various
smart contracts. Earlier known as OmiseGo, this Layer-2 scaling solution was built on the Ethereum
blockchain. This allows the OMG Network to enable users to transfer ETH and ERC20 tokens seamlessly.
This ensures that OMG Network can reduce the speed and cost before it can be optimised on
other networks and built to make ETH more attractive to businesses and projects while
focussing on reducing carbon footprint. This also allows the protocol to reduce electricity
usage and cut fees by around two-thirds. The OMG network on Wednesday was seen trading at
US$1.82 with a trading volume of US$3,59,17,489 over a day, according to CoinMarketCap.
SKALE Network (SKALE) SKALE Network (SKL)
offers a Layer 2 solution that allows users and developers to build multiple DApps projects. As a
decentralised project, it aims to reduce dormancy to ensure that payments are made cost-effectively.
The SKALE network on Wednesday was seen trading at US$0.047022with
a trading volume of US$ $95,98,416 over a day, according to CoinMarketCap.
Bottomline Scalability has often been seen as
the central pivot around which the blockchains operate. Layer 1 cryptos, such as Bitcoin and
Ethereum, often struggle with this, which hinders their reaching their full potential. The Layer
2 blockchains resolves these issues thereby making blockchain technology more scalable.
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