Which Layer 2 Solutions Should You Monitor in 2025? A Comprehensive Breakdown

Why Layer 2 Matters Now More Than Ever

Bitcoin handles roughly 7 transactions per second, while Ethereum processes around 15 TPS on its mainnet. Compare that to Visa’s 1,700 TPS, and you’ll see why the blockchain industry faces a critical bottleneck. This is where Layer 2 solutions enter the picture—they’re essentially secondary networks that batch transactions off the main chain before settling them back, dramatically cutting costs and boosting speed.

The real question isn’t whether Layer 2 is necessary, but which projects are worth your attention in 2025.

Understanding the Layer 2 Landscape: Rollups, Sidechains, and Beyond

Layer 2 protocols come in several flavors, each tackling the scalability puzzle differently:

Optimistic Rollups assume transactions are valid by default, only investigating disputes when flagged. Projects like Arbitrum and Optimism follow this approach, offering solid throughput at 2,000-4,000 TPS.

Zero-Knowledge Rollups (zk Rollups) bundle transactions into cryptographic proofs, hiding transaction details while proving validity. This method excels at privacy and efficiency—ideal for platforms handling sensitive financial data.

Plasma Chains operate as linked sidechains, processing transactions independently while anchoring security to the main network.

Validium strikes a middle ground, processing transactions off-chain while validating them through cryptographic proofs, balancing speed with security.

The Top 10 Layer 2 Projects Reshaping 2025

1. Arbitrum: The Market Leader

Performance: 2,000-4,000 TPS | TVL: $10.7 billion | Current Price: $0.21 | Market Cap: $1.21B
Technology: Optimistic Rollup

Arbitrum commands over 51% of the Ethereum Layer 2 market by TVL, making it the dominant force. Transactions process 10x faster than Ethereum mainnet with gas costs slashed by up to 95%. The ecosystem includes DeFi protocols, NFT marketplaces, and gaming platforms, with ARB token powering fees and governance.

Arbitrum’s developer experience is smooth, but newer Layer 2 projects carry inherent risks. Still, the strong team and active community keep it evolving.

2. Optimism: The Fast Follower

Performance: 2,000-4,000 TPS | TVL: $5.5 billion | Current Price: $0.31 | Market Cap: $610.64M
Technology: Optimistic Rollup

Optimism leverages the same Optimistic Rollup technology but emphasizes decentralization and community governance. Transactions move 26x faster than Ethereum with up to 90% fee reduction. The OP token enables staking and governance participation.

The platform attracts developers with familiar Ethereum tools and a collaborative environment, though it shares similar risks with Arbitrum regarding mainnet dependency and decentralization challenges.

3. Lightning Network: Bitcoin’s Speedy Companion

Performance: Up to 1 million TPS | TVL: $198 million
Technology: Bi-directional payment channels

The Lightning Network operates entirely off-chain, enabling Bitcoin micropayments with near-instant confirmation. This Bitcoin Layer 2 solution achieves what Bitcoin alone cannot—practical everyday transactions at scale.

However, it demands technical sophistication from users, has limited mainstream adoption, and carries potential security considerations for newcomers. Yet for Bitcoin enthusiasts seeking micropayment functionality, it remains unmatched.

4. Polygon: The Ecosystem Player

Performance: 65,000 TPS | TVL: $4 billion | Market Cap: $7.5 billion+
Technology: zk Rollup and other scaling solutions

Polygon offers a multichain approach, combining zkRollups with sidechain technology. With throughput exceeding Bitcoin and Ethereum by orders of magnitude, it hosts leading DeFi protocols (Aave, SushiSwap, Curve) and major NFT marketplaces.

MATIC powers gas fees, staking, and governance. Polygon’s strength lies in its diverse ecosystem and proven infrastructure, though its complex layered architecture can overwhelm newcomers.

5. Base: Coinbase’s Bet on Layer 2

Performance: 2,000 TPS | TVL: $729 million
Technology: Optimistic Rollup (OP Stack)

Coinbase’s Base targets near-instant transactions with up to 95% fee reductions using the OP Stack framework. Backed by Coinbase’s security expertise and user base, Base offers developer-friendly tools and streamlined deployment.

Though still evolving, Base’s institutional backing and focus on accessibility position it as a significant contender worth monitoring.

6. Dymension: The Modular Challenger

Performance: 20,000 TPS | TVL: 10.42 million DYM
Technology: RollApps (modular rollups)

Dymension separates consensus, execution, and data availability into specialized RollApps on a secure settlement hub. This modularity allows developers to tailor solutions for specific use cases while inheriting security from the Dymension Hub.

The native DYM token handles fees and governance. While still in development, its modular design offers flexibility that traditional rollups can’t match—though complexity may deter mainstream users initially.

7. Coti: Pivoting Toward Privacy

Performance: 100,000 TPS | TVL: $28.98 million | Current Price: $0.02 | Market Cap: $56.31M
Technology: zk Rollup

Coti is transitioning from a Cardano L2 to become Ethereum’s privacy-focused Layer 2. This shift brings garbled circuits technology for transaction confidentiality while leveraging Ethereum’s security.

COTI tokens migrate to the new Ethereum Layer 2 network. The transition requires careful execution, but it positions Coti uniquely at the intersection of privacy and scalability.

8. Manta Network: The Privacy Champion

Performance: 4,000 TPS | TVL: $951 million | Current Price: $0.08 | Market Cap: $37.12M
Technology: zk Rollup

Manta Network combines Manta Pacific (an EVM-compatible Layer 2) with Manta Atlantic (handling private identity via zkSBTs). Zero-knowledge cryptography ensures transaction validity without exposing details—critical for confidential smart contracts.

MANTA fuels the network. Manta rapidly ascended to become the third-largest Ethereum Layer 2 by TVL since launch, proving strong market demand for privacy-centric solutions.

9. Starknet: The Cairo Innovator

Performance: 2,000-4,000 TPS (theoretical millions) | TVL: $164 million
Technology: zk Rollup (STARK proofs)

Starknet uses STARK proofs—a zero-knowledge variant—to validate transactions off-chain, potentially scaling to millions of TPS. Cairo, its programming language, attracts developers seeking powerful, unfamiliar tools.

The network is commitment to full decentralization remains ongoing. While smaller than competitors, Starknet’s innovative cryptography and rapidly growing DeFi/NFT ecosystem appeal to early adopters.

10. Immutable X: Gaming’s Layer 2

Performance: 9,000 TPS+ | TVL: $169 million | Current Price: $0.27 | Market Cap: $223.02M
Technology: Validium

Immutable X specializes in gaming and NFTs, achieving 9,000 TPS with near-instant transactions and minimal fees. The Validium approach provides scalability while maintaining Ethereum security.

IMX powers fees and governance. With major game partnerships and true NFT ownership, Immutable X demonstrates how Layer 2 enables Web3 gaming at scale—a use case where traditional chains struggle.

Layer 2’s Role in Ethereum’s Evolution

Ethereum 2.0, particularly through Proto-Danksharding, will uplift Layer 2 efficiency further. Projected to boost Ethereum to 100,000 TPS when fully implemented, Danksharding reduces Layer 2 transaction costs and improves sequencer support.

Crucially, Ethereum 2.0 and Layer 2 solutions aren’t competitors—they’re complementary. Layer 2 networks handle application-level scaling today, while Ethereum 2.0 provides better base-layer support tomorrow. Together, they create a resilient, scalable blockchain ecosystem capable of supporting mainstream adoption.

Making Your Layer 2 Decision

Choosing among Layer 2 solutions depends on your priorities:

• Maximum market adoption: Arbitrum leads by TVL and ecosystem maturity
• Privacy-first transactions: Manta Network or Coti offer zero-knowledge solutions
• Gaming and NFTs: Immutable X specializes in this domain
• Bitcoin users: Lightning Network remains unbeaten for off-chain Bitcoin scaling
• Modular flexibility: Dymension offers customizable RollApps

Layer 2 isn’t a temporary fix—it’s fundamental infrastructure. As 2025 unfolds, these ten projects will continue shaping how billions interact with blockchain technology: faster, cheaper, and more accessible than ever.