5 Top Layer 2 cryptocurrencies to watch out for

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5 Top Layer 2 cryptocurrencies to watch out for

 5 Top Layer 2 cryptocurrencies to watch out for
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Highlights

  • 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 Layer 2 cryptos inculcates the features of Layer 1 cryptos, it can offer the investors more options while transacting. 

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.

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 July 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 July, 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 July 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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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.

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. 

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