Best Layer 2 Crypto Coins List For July 2024

The ever-increasing prices on the top blockchain networks like Bitcoin and Ethereum have resulted in Layer 2 projects being launched in large numbers. Many of these projects provide strong solutions and have been successful, but only recently has the Layer 2 crypto category seen a boom.

Investors are always looking for projects that provide value and could offer excellent returns in the future. With Layer 2 cryptos bringing these aspects together, there has been considerable demand for good L2 blockchain cryptos. In this guide, we shall look at 10 such projects worth investing in.

Top Layer 2 Crypto Coins to Buy Reviewed – Full List

Here is a detailed breakdown of the projects we found worth investing in right now:

Pepe Unchained – Memecoin With Its Own Layer 2 Blockchain For Enhanced Transactions

It may be surprising for investors to connect something as utility-driven as Layer 2 blockchains with a category like memecoins. Well, this is exactly what Pepe Unchained aims to achieve with its exciting and innovative concept.

Pepe Unchained is a brand new memecoin that was introduced in June 2024, referencing Pepe, one of the biggest memecoins in the world. The timing of this launch was impeccable since Pepe has only recently recorded its all-time high, and the community seems very active, which Pepe Unchained developers hope will spill over to this new project too.

Pepe Unchained uses a unique story-like theme to explain its motto, which is to create a better and enhanced version of the original PEPE token. It does so by introducing its own Layer 2 blockchain, symbolized by the popular Pepe mascot unshackling himself from the rusty old chains of its old blockchain.

With this new Layer 2 approach, the project will feature a “better” version of Pepe, which shall have its own blockchain explorer. Transactions will be at least 100 times faster than they were on the Ethereum chain and will also be much cheaper for its users.

Since Pepe has grown in popularity and may end up being a token of exchange due to its growing community, Pepe Unchained’s concept may end up going viral, making the project one of the best Layer 2 memecoins in the space. The project also offers staking rewards for its presale buyers, adding even more appeal to the ecosystem.

It has already been covered by several leading crypto news websites as well as YouTubers, most of whom claim the project to be a 100x opportunity. Jacob Bury, a popular Youtuber with over 40k subscribers claims that the token could change the game for memecoins, thanks to its Pepe Unchained Layer 2 blockchain offering.

Investors can purchase PEPU, the native token of the project, from its ongoing presale at a highly discounted price of just $0.008 right now. With up to $1 million raised in less than 2 weeks, it may be possible to see the token launch sooner than expected and then be listed across exchanges followed by a huge pump in the coming days.

Visit Pepe Unchained Presale

Polygon – Leading Layer 2 Solution For Ethereum Scaling And DApp Deployment

Whenever one talks about Layer 2 blockchains, the first project that may come to mind is Polygon, earlier known as Matic. Polygon is among the first ever Layer 2 cryptos that caught the attention of the investing community across the globe and is still among the biggest cryptocurrencies as per market cap not only in its own category but within the entire crypto market.

The project was launched in 2017 by two prominent blockchain developers and a business consultant with prior experience in the blockchain industry. It is essentially a scaling solution that seeks to solve the issue of scalability on not just Ethereum but multiple blockchains.

By combining Plasma Framework and proof-of-stake blockchain architecture, Polygon allows for easy execution of scalable and autonomous smart contracts. The project currently boasts about 65,000 transactions per second on a single sidechain, with a block confirmation time of less than 2 seconds. It is widely used by retail investors as well as developers and has attracted over 50 popular DApps to its PoS-secured Ethereum sidechain.

The native token Matic is currently sitting at a market cap of more than $45.5 billion, which means that its growth potential may not be as much as other low market-cap projects like Pepe Unchained.

However, it doesn’t deviate from the fact that Polygon is one of the most sought-after Layer 2 cryptos and still has room for growth. If one is looking to invest in a relatively safer and more stable project that could also end up giving good returns, then they must surely not overlook MATIC as a top option.

Buy MATIC on Coinbase

Immutable X – First Layer 2 Solution Focusing On NFTs With Zero Gas Fees

Some projects gain rapid traction upon launch, and Immutable X is a prime example. Founded by James Ferguson and his brother Robbie Ferguson, both well-known figures in finance and tech, Immutable X has made significant waves in the blockchain space. Immutable positions itself as the first Layer 2 scaling solution for NFTs on Ethereum.

Launched to simplify blockchain transactions for everyday users and developers, Immutable addresses Ethereum’s limitations such as low scalability, poor user experience, illiquidity, and slow developer experience. It offers instant trading, massive scalability, and zero gas fees for minting and trading NFTs, all without compromising user or asset security.

Immutable X is among the first Layer 2 solutions to utilize zk-rollups, focusing exclusively on NFTs. With zk-rollups gaining prominence as a scaling solution, Immutable X stands at the forefront of Ethereum ecosystem development. If it delivers on its promise of over 9,000 transactions per second, it could become the default “NFT blockchain.”

The platform enables users to create and distribute ERC-721 and ERC-20 tokens on a large scale, making it a highly sophisticated yet user-friendly solution. This innovation has positioned Immutable X’s IMX token as one of the most valuable in the Layer 2 blockchain space.

With a market cap exceeding $2 billion, investors and the broader community are optimistic about the growth potential of the gaming and NFT categories alongside IMX’s Layer 2 solution. This growth trajectory could lead to significant appreciation in token value in the coming months or years.

Buy IMX on Coinbase

zkSync – Layer 2 Scaling Solution For Ethereum Utilizing zk-rollups

Anyone following the crypto space has likely heard of zkSync recently. Following one of the most anticipated token airdrops ever, the zkSync project launched its token in June to community members before listing it on major exchanges.

zkSync is a Layer 2 scaling solution for Ethereum designed to increase transaction throughput and reduce fees while maintaining security. Built on ZK-rollup technology, it combines on-chain and off-chain processes to aggregate multiple transactions into a single proof that can be verified on the Ethereum blockchain.

This approach represents a significant advancement in addressing Ethereum’s scalability challenges through innovative use of Zero-Knowledge (ZK) technology. As a Layer-2 protocol on top of Ethereum, zkSync enhances transaction throughput while maintaining the robust security of the mainnet.

The zkSync project was introduced several months ago with an active ecosystem, but most investors were particularly interested in its potential token creation and airdrop. This airdrop became one of the most anticipated events in 2024. The zkSync Association, a non-profit created by Matter Labs, the development firm behind zkSync, managed the airdrop claims.

The team tweeted that users claimed 45% of tokens in under two hours. Since its launch, the native token ZK has experienced high trading volumes and is being promoted by numerous crypto influencers and YouTubers as one of the most undervalued Layer 2 cryptos currently available, making it a project to watch closely.

Buy ZK on Binance

Manta Network – Privacy-Preserving Layer 2 Platform For DeFi Applications

Right after the last bull run ended, there was a surge of interest in the Manta project, which has sustained over several months. Manta Network is a dynamic platform dedicated to building scalable decentralized applications, comprising two distinct networks: Manta Pacific and Manta Atlantic.

Manta Pacific is a native Layer 2 modular blockchain, while Manta Atlantic claims to be the fastest Zero-Knowledge (ZK) Layer 1 chain on Polkadot. Both networks have recently experienced significant growth, surpassing competing Layer 2 solutions like Base in Total Value Locked (TVL).

Manta Network is a privacy-preserving decentralized finance (DeFi) platform built on the Substrate framework, ensuring compatibility with the Polkadot ecosystem. The project focuses on privacy and scalability, addressing common concerns about transaction privacy and speed through advanced cryptographic techniques.

This approach ensures that transactions remain confidential and secure, attracting users and investors who prioritize data security and anonymity. The project’s complex yet effective mechanism has already been adopted by many, and the community speculates it will continue to grow in the coming years.

At the time of writing, Manta Network’s MANTA token is valued at approximately $300 million, with most holders anticipating the token will easily surpass the $1 billion market cap target by the next bull market. With its current developments and consistent growth, this scenario appears likely, making MANTA an excellent crypto to consider within the Layer 2 category now.

Buy MANTA on Binance

Ethernity Chain – Ethereum Layer 2 Platform Integrating AI-Driven Security For NFTs

Ethernity Chain stands out as the smallest Layer 2 crypto among the mentioned projects (excluding Pepe Unchained, which is yet to be launched), making it an appealing option for investors seeking substantial growth potential.

Originally launched as an NFT marketplace, Ethernity Chain has evolved into an Ethereum Layer 2 platform with advanced AI-driven security, setting new standards for on-chain entertainment, powered by its native token, ERN.

Unlike conventional Layer 2 solutions, Ethernity Chain focuses on creating an ecosystem that merges technology and entertainment. Developed in collaboration with industry leaders, Ethernity Chain’s Layer 2 solution features AI-enhanced security and digital rights management (DRM), easy integration with a plug-and-play toolkit, eco-friendly operations with reduced gas fees, and 100% EVM compatibility for seamless operations.

Brands can utilize the Ethernity product suite and toolkit to develop next-generation Web3 applications, including games, digital collectibles, real-world assets (RWAs), and interactive media. With its unique approach, Ethernity Chain distinguishes itself within the Layer 2 category, offering features and use cases not commonly found in other projects.

Despite its relatively low market cap of just $52 million, Ethernity Chain has a large and supportive community. This combination of innovative technology, strategic industry collaborations, and a robust community suggests that the ERN token could be a valuable asset for investors looking for significant future gains.

Ethernity Chain’s focus on tech and entertainment integration positions it uniquely in the Layer 2 space, making it a project to watch closely.

Buy ERN on Binance

Arbitrum – Optimistic Rollup Layer 2 Scaling Solution For Ethereum

Arbitrum gained global recognition due to its massive token airdrop conducted in March 2024. Like other major Layer 2 cryptos, Arbitrum aims to scale Ethereum and power fast smart contract transactions while reducing costs. The Layer 2 solution uses blockchain rollups to achieve efficient transaction processing.

Rollups employ a two-layer architecture to process transactions off-chain before settling them on-chain. The benefit is that the blockchain no longer needs to validate separate transactions – it can directly confirm a “rolled up” batch of transactions. This scaling solution differs from other Layer 2s, such as sidechains, as rollups typically derive their security from the main blockchain.

Arbitrum’s scaling solution uses a particular type of roll-up called optimistic rollups, which process transactions off-chain like other roll-ups but add compression techniques while bundling transactions. This compression helps reduce gas fees and optimizes block space by storing only necessary data on the Ethereum blockchain. Thus, optimistic rollups enable the main chain to process more transactions while requiring less space.

The project has amassed a social media community of over 1 million followers on Twitter alone and has seen consistent growth in recent weeks. Valued at over $2 billion, Arbitrum is the second most valuable Layer 2 crypto according to CoinMarketCap.

Despite this, the project continues to attract a massive influx of investors, suggesting a bullish future for its token in the next couple of months, making its native token ARB also a strong contender within the Layer 2 category.

Buy ARB on Binance

Loopring – Layer 2 DEX Protocol Enhancing Ethereum Trading Efficiency

Founded in 2017 by software engineer Daniel Wang, Loopring (LRC) is one of the pioneering Layer 2 cryptocurrencies, garnering significant following both on social media and in user numbers.

It is a revolutionary Ethereum Layer-2 scaling protocol enabling the creation of decentralized exchanges (DEXs) capable of competing with centralized exchanges in terms of performance. Loopring combines the best features of both centralized and decentralized exchanges.

By utilizing zkRollups, Loopring achieves higher throughput and lower costs than other decentralized exchanges on the Ethereum blockchain, while its non-custodial technology enhances the security seen in centralized exchanges. This makes Loopring an attractive option for traders seeking efficiency and security.

The network can handle up to 1,000 times more trades per second than Ethereum, with each trade costing just a fraction of a cent. This high-performance capability allows algorithmic traders to employ high-frequency trading strategies on DEXs for the first time.

Additionally, Loopring’s cryptographic solutions prevent frontrunning—where traders manipulate pending transactions to profit from price changes. Loopring’s protocol is open-source and audited, ensuring transparency and trust. It operates without relying on any external validators, meaning no person, company, or government can interfere with users’ access to their cryptocurrencies.

With its current price around $0.17, the native token LRC may be in a favorable buying zone for investors and can be a valuable asset for both short-term and long-term investments.

SKALE – Enhancing Ethereum Scalability With Zero Gas Fees

SKALE is a rapidly trending Layer 2 crypto project with a market cap exceeding $280 million and a growing following. Described as a modular blockchain network, SKALE aims to enhance Ethereum’s scalability.

It is the only blockchain network capable of running an unlimited number of fast, on-demand, pooled-security blockchains with zero gas fees for end users. These chains, known as SKALE chains, can be either be dapp-specific or shared.

The project’s website highlights its goal to enable decentralized applications (DApps) to operate in a “decentralized modular cloud built for real-world needs and configured for your requirements,” without compromising security. Developers on SKALE can run Solidity smart contracts thousands of times faster and at a fraction of the mainnet cost, with use cases ranging from gaming to content streaming services.

Founded by Jack O’Holleran and Stan Kladko, both experienced software industry veterans, SKALE addresses Ethereum’s scalability issues and volatile gas fees. SKALE’s architecture ensures zero gas fees for end users, mitigating the impact of fluctuating gas costs on developers, users, and NFT creators. This makes SKALE an attractive option amid the widespread challenges faced by other blockchains, including Ethereum.

SKALE’s unique ability to offer unlimited capacity is a key differentiator. As new nodes join the network, its capacity grows. The network significantly improves the speed of Ethereum-based smart contract transactions, capable of processing up to 2,000 transactions per second per SKALE chain.

Despite strong competition in the Layer 2 space, SKALE stands out due to its innovative developments and upgrades. Its focus on scalability, zero gas fees, and high transaction speeds make it a promising investment and a valuable platform for participation in the evolving blockchain ecosystem.

Merlin Chain – Layer 2 Solution Integrating ZK-Rollups And Decentralized Oracles

Despite having a market cap of about $100 million, Merlin Chain stands out as one of the highest volume-generating projects in the space. High trading volume indicates an active community that keeps pace with market changes and contributes to trading activity.

Unlike most projects focused on scaling Ethereum, Merlin Chain is a Layer 2 solution for Bitcoin. It incorporates essential components like ZK-Rollup networks, decentralized oracle networks, and fraud proofs within the Bitcoin chain. Merlin Chain’s primary objective is to enhance the native assets, protocols, and application ecosystem of Bitcoin Layer 1, promoting innovation and maximizing asset potential on Layer 2 networks.

The native token, MERL, is integral to Merlin Chain’s operations. It is used for staking, collator delegation, network fees, and native liquidity. Backed by major industry names in 2024, Merlin Chain could be an undervalued crypto with significant growth potential. For those seeking a lesser-known but high-potential crypto in the Layer 2 space, Merlin Chain presents a promising option.

Merlin Chain offers a unique Layer 2 solution for Bitcoin, leveraging advanced technologies to support and enhance Bitcoin’s ecosystem. With Bitcoin’s growth, Merlin could also see considerable demand. Its active community and strategic industry backing highlight its potential as an ideal investment in the current crypto space.

What are Layer 2 Cryptocurrencies and How Do They Work?

Layer 2 solutions in cryptocurrency are secondary frameworks or protocols built on top of existing blockchain networks like Bitcoin and Ethereum. Their primary purpose is to enhance scalability, reduce transaction fees, and improve processing speeds without compromising the security and decentralization of the original blockchain.

Layer 1 blockchains handle all transactions directly on their main network, leading to slower processing times and higher fees, especially during periods of high demand. Layer 2 solutions address these issues by offloading some of the transaction processing to secondary networks, which then report the finalized transactions back to the main blockchain. This process helps reduce congestion on the main network, enabling faster and cheaper transactions.

Several types of Layer 2 frameworks exist. Sidechains are separate blockchains that run parallel to the main chain and have their own validators, periodically syncing with the main blockchain. Rollups bundle multiple transactions into a single batch, recorded on the main chain.

There are two types of rollups: ZK-Rollups use cryptographic proofs to validate transactions off-chain and submit a summary to the main chain, while Optimistic Rollups assume transactions are valid by default but can be challenged if found fraudulent.

Plasma uses smaller “child” blockchains that offload transactions from the main chain, with each child chain managing its operations while relying on the main chain for security. Channels establish direct peer-to-peer links for multiple transactions, reducing the need to record each one on the main chain and only opening and closing with two transactions on the main chain.

For example, imagine a busy highway where every car represents a transaction. Traffic jams are common, slowing down all the cars. A Layer 2 solution is like building an express lane (sidechain) or a carpool lane (rollup), where multiple cars can travel together faster.

These express lanes periodically merge back with the main highway, ensuring everyone reaches their destination quicker and more efficiently.

How Did We Rank Each Crypto On The List?

While projects with high utility and potential certainly exist, we have selected these specific 10 projects based on several critical, shared factors:

• Potential for Growth: For an investment to be lucrative, the project must offer substantial room for growth. Projects in trending categories demonstrate long-term usefulness to investors. Larger projects require significant capital inflows to achieve notable price increases, whereas smaller, high-potential projects can deliver substantial returns with smaller investments, making them appealing to investors seeking high-growth opportunities.
• Community Support: Community backing is pivotal for any successful crypto project, whether it’s a memecoin or utility token. Active engagement through posts, trades, and interactions sustains project visibility and drives adoption. A vibrant community often correlates with higher trading volumes, positive market sentiment, and enhanced project resilience.
• Practical Use Case: A project’s realistic application of its use case significantly influences its growth potential. Strong utility that addresses real-world challenges is essential. Projects solving genuine problems are more likely to attract and retain users, ensuring sustained interest and investment over time.
• Strong Endorsements: Support from major crypto projects or influential companies in finance and tech validates a project’s viability. Such endorsements indicate confidence in the project’s use case and commitment to its success. They provide credibility, access to resources, and a network necessary to achieve milestones, fostering steady value appreciation and technological advancement.

All of the projects listed above excel in these areas, underscoring why we have included them in our curated list of the best Layer 2 cryptos.

Layer 2 Cryptocurrencies – Current Market Sentiment

With Bitcoin and other major cryptocurrencies showing strong volatility recently, transactions across multiple blockchains have seen a considerable rise. This increased activity means a load on blockchain networks, which could lead to slow speeds and high fees.

Layer 2 projects, for this exact reason, have been in high demand, especially since a few projects managed to garner popularity through aggressive marketing and awareness creation about their utility and benefits within the industry.

At the time of writing, the total market cap of Layer 2 tokens, as per CoinMarketCap, stands at more than $18 billion, making it one of the fastest-growing crypto categories. This indicates a strong bullish sentiment for the category, suggesting that it may be a good time to consider investing in high-potential L2 projects like the ones mentioned below.

Risks of Buying Layer 2 Cryptocurrencies

Layer 2 cryptocurrencies, like any other category, come with their own set of risks despite their potential for solving significant blockchain issues. Unlike meme coins, which are often driven by hype, Layer 2 solutions are more grounded in addressing practical blockchain challenges, making them potentially good investments.

However, investors should be aware of the following risks when considering Layer 2 cryptocurrencies for short-term profits:

Changing Trends

The cryptocurrency market is exceptionally volatile, with trends shifting rapidly. A Layer 2 crypto that is popular and in demand today may lose its appeal in the future, even if it provides real utility.

It’s crucial to assess whether a crypto asset is overvalued and avoid purchasing it until its price corrects. This approach helps mitigate the risk of buying at inflated prices and facing losses when the market sentiment changes.

New Solutions

While current Layer 2 solutions address current blockchain scalability issues, there’s always the possibility of newer projects emerging with more efficient solutions. These innovations could reduce the demand for existing Layer 2 solutions.

Although current projects may update their offerings, the introduction of entirely new technologies that solve scalability issues more effectively could pose a threat, potentially leading to a decline in the value of existing Layer 2 projects.

Changing Market Conditions

Cryptocurrency prices are heavily influenced by broader market conditions. During a bull market, prices generally rise, while a bear market often sees prices decline. This volatility means that external economic factors and investor sentiment can significantly impact the value of Layer 2 cryptocurrencies, regardless of their intrinsic utility or ongoing development progress.

Stagnant Development

Continuous innovation and development are critical for the long-term success of any cryptocurrency project. If a Layer 2 project fails to innovate or if its development stagnates, it risks losing its competitive edge.

Even if it is currently a leading crypto, slow or lacklustre development can result in a decline in value over time as newer, more advanced projects attract market interest and investment.

Navigating these risks requires careful research and monitoring of market trends, technological advancements, and the development progress of Layer 2 projects.

Conclusion

Investing in Layer 2 cryptocurrencies can be a promising opportunity right now, especially given their potential to address key blockchain issues like scalability and high transaction fees. The projects mentioned in this article are excellent options to consider, each offering unique advantages and potential for growth.

However, it’s crucial for investors to conduct thorough research before making any investment decisions. Understanding the project’s utility, community support, development roadmap, and backing can significantly mitigate risks. By staying informed and choosing wisely, investors can make the most of the opportunities presented by Layer 2 solutions within the blockchain space.

Our top pick when it comes to Layer 2 cryptos right now is Pepe Unchained, which is an early-stage memecoin project offering an innovative Layer 2 solution that caters to the Pepe memecoin community.

Visit Pepe Unchained Presale

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