What is Layer 2 Blockchain Solution And Why Are They Important?

Layer 2 blockchain solution

Blockchain technology has completely changed the way we see decentralization, transparency, and trust. Nevertheless, there is a noticeable increase in network congestion and a delay in transaction processing times. This can play the role of layer 2 blockchain scaling solutions. Layer 2 solutions are off-chain options that preserve the same degree of decentralization and security.

Multiple decentralized applications, includes gaming, and DeFi, using Layer 2 technologies for building blockchains. But Layer 2 solutions come with dangers and obstacles as well, such as centralization, compatibility issues, and security issues. Furthermore, as their on-chain equivalents, but they enable quicker and less expensive transactions.  

Coinfantasy can help establish bridges between Layer-1 and Layer-2 networks, providing smooth interaction between multiple blockchains. This is critical for building a strong and efficient blockchain ecosystem. We will go into more detail about Layer 2 blockchains and their operation in this section. 

What are Layer 2 solutions in Blockchain technology?

Before we get into Layer 2 solutions, it’s important to define Layer 1 and distinguish between the two concepts and their differences.

Layer 1 solutions are the network’s essential components that communicate the architecture of the main blockchain. They create them on top of the Layer 1 blockchain, which is already in place, to improve its performance without changing the original layer. Bitcoin, Ethereum, Solana, Binance Smart Chain, Litecoin, and Polkadot are just a few examples of Layer 1 solutions.

Creators designed technologies known as Layer 2 solutions to increase the efficiency and scalability of blockchain networks. To improve its performance without changing the original layer, they are created on top of the Layer 1 blockchain, which is already in place.

Blockchain layer 2 solutions address one of the most difficult challenges facing the cryptocurrency industry. These solutions are more than simply technological breakthroughs. They also mark a step toward increasing the applicability of blockchain technology, paving the road for its eventual general acceptance.

How do Layer 2 solutions work?

Layer 2 solutions play an important role in the Bitcoin ecosystem. Despite considerable advances in Layer 1 blockchains, intrinsic scalability constraints continue to pose issues.

Layer 2 bitcoin based network, allow for the execution of low-value transactions across several blockchains. These transactions are then sent to the main blockchain for final recording. This technique reduces congestion on the mainnet and addresses the scalability issue with Layer 1 blockchains.

Different Types of Layer 2 solution

  • State Channels: These are off-chain transactions between two parties. On the blockchain, these transactions are only documented in their initial and final states. The Bitcoin lightning network serves as one illustration.
  • Sidechains: These are distinct blockchains that have a two-way peg connecting them to the main blockchain. Sidechains can have their consensus techniques and block specifications, and they can function autonomously.
  • Rollups: These solutions retain transaction data on-chain but perform transactions off-chain, away from the main chain. There are two types of rollups such as ZK-Rollups (Zero-Knowledge Rollups) and Optimistic Rollups. Each form of roll-up has a unique way of managing transactions and guaranteeing security.
  • Plasma: With Plasma, developers can build scalable applications linked to the Ethereum main chain.

5 Best Layer 2 Solutions in 2024

At Coinfantasy, we are using our extensive technical experience to help you capitalise on the dynamic world of blockchain. Here, we lookout for the list of Layer 2 blockchains in 2024:

1. Polygon (MATIC)

The Layer-2 blockchain protocol Polygon, which is originally known as the Matic network. Simultaneously, it can be address Ethereum’s scalability problems. A different Ethereum-compatible blockchain that manages transactions and returns them to its mastering blockchain.

Furthermore, this network put forward on our layer 2 blockchain list. A technique like this reduces Ethereum’s network strain. Users may communicate with any DApp on the Polygon network without experiencing any problems with network congestion.

Key points

  • Polygon processes block on average significantly faster compared to Ethereum. 
  • An about $0.01 transaction cost is normal.
  • Use side chains to prevent Ethereum congestion and growth.
  • Use a Proof-of-Stake consensus method to validate transactions more quickly and energy-efficiently.

2. Arbitrum

The growth of Ethereum impacted by its increased transaction costs. One of the most well-known layer 2 blockchain systems, Arbitrum owned by Offchain Labs. It has gained popularity as a potential remedy for the high fees and congestion problems on the Ethereum network. By using Arbitrum, optimistic roll-up technology, a particular kind of layer 2 scaling solution. 

In this method, the majority of transactions are handled off-chain, just the transaction data and a roll-up are sent to the Ethereum security mainnet. Nonetheless, this layer 2 blockchain list approach makes transactions faster and more affordable while also reducing mainnet congestion.

Key points

  • One of the greatest rollups compatible with EVMs is Arbitrum.
  • Integrates well with the tools and apps for Ethereum that are already in place.
  • Roll-up technology that works well reduces costs to a very small amount.

3. Avalanche Subnet

A Subnet, called by “subnetwork,” on Avalanche is a group of nodes that cooperate to reach an agreement on transactions connected to one or more blockchains. It may be a network built on top of another network with a large infrastructure, or as a network inside another network. 

Furthermore, Subnet is the second significant advancement that makes it possible to create unique blockchains and helps to grow, after Avalanche Consensus. Our layer 2 blockchain list solution has the potential to open up new blockchain opportunities.

Key points

  • Utilise subnets to reduce network congestion, which will lower transaction costs.
  • Users do not need to communicate with the X-Chain to participate in cross-chain transfers.
  • Users may customize their Subnet with a great deal of freedom.

4. StarkNet

StarkNet is a layer 2 Validity-Rollup (or ZK-Rollup) network constructed on the Ethereum network. It makes DApp scalability easier without compromising security. higher throughput, cheaper costs, and faster processing times.

Nevertheless, Starknet is a worthwhile exploration if you’re searching for blazingly fast and secure layer 2 blockchain solutions to interface with the Ethereum upgrade blockchain.

Key points

  • For effective and user-friendly experiences, employ Native Account Abstraction.
  • Make use of STARK technology’s power to ensure computational integrity.
  • The native smart contract language of Starknet, Cairo, lets developers write any form of business logic.

5. ImmutableX

The ImmutableX is a game-specific chain that combines the strength of Ethereum which provides scalability, security, and interoperability. While there may be friction and high transaction costs in other marketplaces, blockchain games require an ecosystem to be successful. 

Given these circumstances, Immutable zkEVM stands out as one of the most promising layer 2 blockchain systems. Moreover, with an emphasis on providing a frictionless gaming environment through liquidity, a vibrant player base, and powerful network effects.

Key points

  • Accessible through immutable SDKs and APIs.
  • Protected by zk-proofs and Ethereum.
  • Composability of atomic contracts.
  • Compatible with the Ethereum toolchain, including Hardhat, RPC nodes, Solidity, etc.
According to a Statista analysis, worldwide spending on blockchain technologies is likely to exceed $19 billion by 2024.

Benefits of using Layer 2  blockchain network

1. Scalability

2. Low transaction fees

3. Faster confirmations

4. High privacy concerns 

5. Cross-chain interoperability

Things to be considered by using Layer 2 blockchain network

1. Complexity

2. Limited number of operators

3. Maintenance cost is high

4. Users may collapse because of multiple chains.

Types of Layer 2 Blockchain Scaling Solutions

There are various types of Layer 2 blockchain scaling solutions, such as:


Instead of processing transactions one by one, you can “roll up” bundles of transactions into a single transaction, greatly increasing the number of transactions that you can perform simultaneously.

Side chains

Side chains substantially enhance the transaction-processing capability of a blockchain. But, you must trust the integrity of both the side chain network and the bridge network that connects it to the main blockchain.

State Channels

State channels are similar to side chains in that transactions are recorded off-chain. However, these transactions are recorded in bulk off-chain, and the channel’s state is set to completion. Transactions are then recorded in bulk on the main blockchain network by broadcasting a finished “state” to the network. Because, this is how Bitcoin’s Lightning Network is configured.

Applications of Layer 2 Blockchain Solutions

Layer 2 scaling solutions can allow a diverse set of use cases for decentralized apps. A few of the most potential application cases are:

  • Decentralized Finance (DeFi) apps 

DeFi apps can benefit from Layer 2 scaling solutions, which boost transaction throughput and make them more economical for customers. Furthermore, decentralized gaming for layer 2 scaling solutions can improve the privacy and security of DeFi transactions.

  • NFT

Non-Fungible Tokens (NFTs) may be created and traded using Layer 2 scaling solutions, which provide cheaper costs and quicker transaction times than on-chain alternatives. This opens up new applications for NFTs projects, such as gaming and digital collectibles. 

  • Micropayments 

Pay-per-use services and content monetization can benefit from Layer 2 scaling solutions as they can handle micropayments at a far cheaper cost than on-chain solutions.

  • Supply Chain Management

By permitting off-chain transaction processing, cutting expenses, and boosting scalability, Layer 2 scaling solutions may promote more secure and effective supply chain management.

  • Gaming

Real-time gameplay and lower in-game transaction costs are made possible by gaming Layer 2 scaling solutions, which may boost the transaction throughput of gaming applications.

The future of blockchain era for layer 2 solutions 

The creation of Layer 2 solutions is actual evidence of the blockchain space’s ongoing development and maturation. These adjustments go beyond simple technical ones. Nevertheless, they are critical to the general acceptance of layer 2s cryptocurrency and blockchain technology.

Layer 2 solutions are paving the way for more effective, affordable, and user-friendly blockchain networks by solving the scaling problem. The secret to widespread acceptance is to make them useful and accessible for routine business operations as well as large-scale organization use.

Blockchain networks will become more accessible to a wider range of users worldwide as Layer 2 solutions develop. In addition to, solving throughput and scalability issues, Layer 2 will play a key role in paving the road for a more democratic and equitable digital economy.

This advancement has taken a major step toward achieving the full potential of blockchain technology. Blockchain ecosystems can become a feasible and useful option for regular apps and consumers by becoming more effective, affordable, and user-friendly. 


The general uptake and expanded capacity of a cryptocurrency network depend on the best layer 2 scaling solutions of a blockchain network. In addition to increasing the capacity to process considerably more transactions, both Layer 1 and Layer 2 scaling solutions aid in maintaining the integrity of the underlying blockchain.

However, built-in dangers might jeopardize a specific blockchain’s security or even the integrity of the project as a whole.

As a key component in improving blockchain ecosystems, layer-2 blockchain protocols have become important in facilitating quicker, affordable, and scalable transactions. Through its resolution of the shortcomings of Layer-1 protocols, Layer-2 networks represent a revolutionary stage in the development of blockchain technology.

Layer 2 is a tectonic upheaval, not merely a trend, in 2024. These networks are influencing how the cryptocurrency market develops, from creative Bitcoin scaling solutions to successful Ethereum layer 2 initiatives.

They are laying the groundwork for broader acceptance, opening up fresh possibilities, and demonstrating that blockchain technology is quick, cheap, and available to everybody. If you also want to leverage the power of layer 2 blockchain solutions, trusting Coinfantasy the GameFi platform to play to yield is a good choice.

Frequently Asked Questions

1. How do solutions in Layer 2 operate?

Smart contracts and transaction processed by Layer 2 solutions independently of the primary blockchain. The majority of their activities using state channels, sidechains, and rollups, all of which preserve security via cryptographic proofs. To maintain transaction integrity, these solutions regularly settle with the main blockchain.

2. What is a Layer 2 Solution?

Layer 2 blockchains, also known as subnet blockchain games, are independent blockchains built on top of layer 1 blockchains in order to increase data and alleviate bottlenecks.

3. What makes Layer 2 solutions crucial?

Layer 2 solutions increase transaction throughput and decrease costs, they improve the performance of best blockchain networks, which makes them indispensable. This promotes innovation, broadens the usage of blockchain technology, and makes NFT decentralized apps (DApps) more useful for daily tasks.

4. How does Ethereum benefit from Layer 2?

Ethereum intends to scale using Layer 2 blockchains. L2 chains enable Ethereum to scale by completing transactions off-chain, allowing for more transactions per second at reduced costs throughout the network.

5. What is the distinction between Layer 1 and Layer 2 scaling?

Layer 1 scaling solutions involve making changes to the blockchain network’s fundamental protocol to increase scalability. Layer 2 scaling solutions improve scalability by leveraging off-chain services or networks.

6. What is layer 3 cryptography?

Layer 3 blockchains are often referred to as “application layers”. The primary goal of this layer is to provide a foundation for dApps, allowing other apps to function. At this point, the goal is to introduce cross-chain capabilities to blockchain networks and genuine interoperability to blockchains.