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- 1 Layer-2 coins have emerged as a better version of cryptos that users have been already using.
- 2 These assets come with better scalability and are more efficient to be used in real-time.
- 3 Their adoption is growing and they are gaining more value as well.
Layers are the models on which blockchains are designed. All the first-generation cryptocurrencies are Layer-1 coins. They include the likes of Bitcoin, Ethereum, Litecoin, Ripple, etc. As the term quite explains itself, Layer-1 is the initial and base model.
They comprise of fundamentals like data storage, transaction validation, and consensus. It works like a backbone to the coin. But here’s where the problem arises. While the Layer-1 model takes care of the basics, it lacks scalability and efficiency to meet today’s needs. Hence, the developers came up with a secondary model called Layer-2.
This one particularly focuses on the enhancement of the blockchain. It improves the speed, reduces the fee, and makes the crypto more adaptable. Some examples of the same are Polygon on Ethereum and Lightning Network on Bitcoin. Needless to mention, Layer-2 coins have gained huge traction. As they take blockchain ahead, the crypto users clearly see them as the future. Thus, the Layer-2 coins have become quite profitable as well.
Layer-2 Assets That Will Rule The Markets
Based on a comprehensive analysis, these are the cryptos that experts have picked.
Arbitrum
Arbitrum enables Ethereum to execute 40,000 transactions per second at a very low fee. Additionally, it improves smart contract functionalities and eases usage. Its robust mechanism empowers developers to create high-end decentralized applications. For all these reasons, this coin gains great value in the market.
Optimism
Optimism uses a unique method to improve transaction speed. It settles transactions on the blockchain that run in parallel with the Ethereum network. This also lowers the fee considerably. Besides that, it facilitates the development of scalable DeFi protocols with EVM-compatible smart contracts. It has become a popular choice among traders lately.
Immutable X
Immutable X has been developed to improve the scalability of NFTs on the Ethereum network. It makes minting and trading of NFTs faster with zero costs. To make this happen, the protocol deploys the zero-knowledge roll-up or zk-rollup method. It has also become a favorite of crypto traders.
Loopring
Loopring focuses on reducing gas costs while achieving better throughput. It also amps up the security and combines the features of centralized and decentralized exchanges. Moreover, it processes buyer and seller orders without taking control of their funds. With all the unique features, it has become a valuable investment for crypto traders.
Inspect (INSP)
Built by and for X (formerly Twitter), Inspect is a Layer-2 crypto that comes with multiple functionalities. It facilitates access to NFTs, cryptos, GameFi, and many other services to Web3 users. Within a very short time, the platform garnered 150,000 unique users. For many reasons, its profitability is undisputedly high.
Conclusion
Layer-2 blockchain has put forward infinite possibilities for cryptocurrencies. They are making digital assets more efficient and favorable for industry usage. As a result, the adoption of these coins is growing exponentially. So, the investors putting money into these tokens are definitely making a wise decision. They are securing profits and benefits for their future.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
