Exploring Layer 2 (L2) Solutions: Best Layer 2 (L2) Cryptos to Buy in 2023
Layer 2 (L2) cryptos have been making significant strides in the last few years, showcasing a transformative shift in the ecosystem. They continue to thrive and gain immense popularity and usage due to Ethereum’s high gas fees and slow processing speeds.
As cryptocurrencies continue to gain traction, the demand for faster and less expensive transactions is increasing. To address these demands, Layer 2 crypto projects provide improved blockchain network scalability, especially within the Ethereum network. These solutions facilitate increased transaction speed and cost reduction by enabling off-chain processing while also maintaining the security of the main (L1) blockchain.
Recent data from layer 2 analytics site L2Beat shows that the total value locked (TVL) in Ethereum layer 2 is approximately $10.6 billion, more than double the value at the beginning of the year. The rising TVL reflects the growing importance of Layer 2 solutions in the ecosystem.
What is a Layer 2 Blockchain and Why is it important?
Layer 2 blockchain is a specific set of scaling solutions designed to improve the scalability and performance of an existing blockchain, commonly known as a Layer 1 (L1) network, while still taking advantage of the robust decentralized security of the underlying blockchain.
Originally coined by Vitalik Buterin, the blockchain trilemma proposes that the three desirable aspects of a blockchain should be decentralized, scalable and secure. However, with L1 blockchains such as Bitcoin and Ethereum, scalability is often sacrificed for other benefits. To solve this trilemma once and for all, Layer 2 crypto solutions were developed.
L2 blockchains are designed to address demand exceeding the Ethereum blockchain’s 1+ million
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