Layer-2 Crypto Projects to Watch in 2025: Complete Analysis and Market Overview

Blockchain has evolved from an initial payment network into the infrastructure for DeFi, GameFi, NFTs, and Web3. However, the biggest bottleneck to mainstream adoption is the scalability issue. Bitcoin processes about 7 transactions per second, Ethereum Layer-1 handles around 15, far below Visa’s 1,700 TPS. Layer-2 solutions have thus emerged as a key technology to break through the blockchain trilemma.

Core Mechanism of Layer-2: From Congestion to High Speed

Layer-2 protocols operate above the main chain, transferring transaction processing off-chain, and then submitting aggregated summaries to the main chain. This design is similar to adding dedicated express lanes on a highway—transactions are processed quickly on auxiliary networks, reducing main chain load while maintaining security.

Compared to Layer-1, direct benefits of Layer-2 include:

• Cost Optimization: Reducing transaction fees by 90-95%, making DeFi and NFT applications truly usable
• Speed Enhancement: Processing speeds exceeding the main chain by 10-26 times
• Promotion of Adoption: Low costs and fast confirmations pave the way for large-scale blockchain applications

Overview of Layer-2 Technology Classifications

Optimistic Rollups: Assume transactions are valid by default, only challenging fraud proofs if proven fraudulent—lowest cost but requires waiting for challenge periods. Arbitrum and Optimism adopt this scheme.

Zero-Knowledge Rollups: Compress transactions via zero-knowledge proofs, no challenge period needed, offering stronger privacy. Polygon, Manta Network, and Coti use this technology.

Validium: Off-chain validation with cryptographic proofs, used in high-throughput scenarios like Immutable X.

Payment Channels: Lightning Network (Bitcoin L2) employs this scheme, achieving millions of TPS but with limited application scenarios.

2025 Layer-2 Ecosystem Panorama: Top 10 Projects Analysis

Arbitrum: A Market Leader Reaching New Heights

• Throughput: 2,000-4,000 TPS | TVL: $10.7B | Price: $0.21 | Market Cap: $1.22B
• Technology: Optimistic Rollup

Arbitrum commands over 51% of Ethereum L2 TVL. Its core competitiveness lies in developer friendliness—supporting Solidity and familiar toolchains. Its ecosystem includes top protocols like Uniswap, Aave, and ongoing technical iterations by Offchain Labs. The ARB governance token empowers community decision-making, with the network gradually moving toward decentralization. Risks include its relative youth and unknown factors, but a strong dev team and active community bolster its defenses.

Optimism: Differentiated Strategy of the Challenger

• Throughput: 2,000 TPS (peak 4,000) | TVL: $5.5B | Price: $0.32 | Market Cap: $612.39M
• Technology: Optimistic Rollup

As an Optimistic Rollup, Optimism emphasizes community governance and ecosystem inclusivity. The OP token is distributed to developers and community participants to accelerate decentralization. Major DeFi apps like Aave and Curve have deployed on Optimism, supporting its $5.5B TVL. Compared to Arbitrum’s quantitative advantages, Optimism focuses more on governance innovation and user-friendliness. However, this also entails higher technical adaptation costs—long-term attention needed on Ethereum dependency risks.

Polygon: Ambitions for Multi-Chain Ecosystem Expansion

• Throughput: 65,000 TPS | TVL: $4B | Price: MATIC integrated into ecosystem
• Technology: zk Rollup + Multiple Schemes

Polygon’s uniqueness lies in its multi-technology approach. zkRollup offers high-speed private transactions, while sidechains like Mumbai use PoS consensus. Its 65,000 TPS capacity performs well in NFT and daily interactions. Mainstream NFT marketplaces like OpenSea and Rarible have integrated Polygon solutions. Unlike Arbitrum and Optimism with single schemes, Polygon offers tailored options for different use cases, though this increases the learning curve. DeFi TVL exceeds $845 million, ranking among the top in L2.

Manta Network: Dark Horse in Privacy Track

• Throughput: 4,000 TPS | TVL: $951M | Price: $0.08 | Market Cap: $37.19M
• Technology: zk Rollup + Privacy Circuits

Privacy is Manta’s core DNA. Pacific module handles EVM-compatible transactions, Atlantic manages identity privacy via zkSBT. Universal Circuits tools enable developers to easily build privacy DeFi applications. Since launch, it quickly became the third-largest Ethereum L2 by TVL, surpassing Base. This growth reflects strong market demand for privacy features. MANTA tokens drive the network, with participants earning staking rewards.

Base: Coinbase-backed Newcomer

• Throughput: 2,000 TPS | TVL: $729M | Price: Focused on developers
• Technology: Optimistic Rollup (OP Stack)

Coinbase’s Base aims to be a bridge between Ethereum and mainstream users. Using OP Stack (Open-source framework of Optimism), it accelerates development cycles. Its security model leverages Coinbase’s financial-grade protections to attract institutional participation. Although TVL is relatively small, Coinbase’s brand and user base create long-term growth potential. Developer-friendly environment with simplified deployment.

Lightning Network: Bitcoin’s Payment Revolution

• Throughput: Millions of TPS | TVL: $198M+ | Price: No native token
• Technology: Bi-directional Payment Channels

Lightning breaks Bitcoin’s 7 TPS barrier, enabling millisecond confirmations and microtransactions. Its reusable bidirectional channels support real-time applications. However, technical complexity, lower adoption than mainnet, and potential security vulnerabilities remain challenges. Suitable for micro-payments and IoT scenarios, but high entry barriers for average users.

Starknet: Pioneer of Zero-Knowledge Proofs

• Throughput: 2,000-4,000 TPS (theoretically millions) | TVL: $164M | Technology: zk Rollup (STARK proofs)

Starknet uses STARKs instead of SNARKs, avoiding trusted setups. Its Cairo programming language is unique but has a steep learning curve. Theoretical throughput is impressive, but the actual ecosystem is still developing. User base is niche, mainly attracting privacy-focused and decentralization-enthusiastic developers. Continuous upgrades and rapid iterations, but stability remains to be validated.

Immutable X: Dedicated Gaming NFT Layer

• Throughput: 9,000 TPS+ | TVL: $169M | Price: $0.27 | Market Cap: $222.20M
• Technology: Validium

IMX is optimized for gaming and NFTs. Validium design allows NFT transactions to far surpass general-purpose L2. Naturally suited for high-frequency gaming interactions and batch NFT minting. Leading games like Gods Unchained choose IMX as infrastructure. IMX tokens are used for fees, staking, and governance, with holders participating in ecosystem decisions.

Coti: From Cardano to Ethereum Migration

• Throughput: 100,000 TPS | TVL: $28.98M | Price: $0.02 | Market Cap: $56.54M
• Technology: zk Rollup + Privacy Mechanisms

Coti shifted from Cardano L2 to Ethereum L2, combining advantages of both ecosystems. Retains privacy features (garbled circuits), migrating to EVM-compatible architecture. The ambitious 100,000 TPS goal requires ongoing development. COTI tokens migrated to the new L2; existing holders should watch for contract upgrades.

Dymension: Modular RollApp Ecosystem

• Throughput: 20,000 TPS | TVL: 10.42M DYM
• Technology: RollApps + Modular Design

Dymension pioneers L2 modular architecture within Cosmos ecosystem. RollApps allow developers to choose consensus, execution, and data availability layers, enabling flexible customization. Built-in trustless cross-chain via Rollup and IBC support for multi-chain interoperability. Well-designed but complex, requiring high developer expertise.

The Profound Impact of Ethereum 2.0 on L2

Danksharding upgrades (including Proto-Danksharding) are expected to boost Ethereum throughput to 100,000 TPS. This change is not about redundancy but about strengthening synergy:

• Cost Revolution: Proto-Danksharding reduces L2 transaction fees, opening the door for mass adoption
• Seamless Integration: Enhanced support for L1-L2 rollups, alleviating sequencing and data availability bottlenecks
• User Experience: Faster confirmations, less network congestion, and near-zero gas fees

L1 and L2 collaboration is maturing, not competing.

Market Status and Outlook

By 2025, the hot topics in Layer-2 news are clear:

• Arbitrum and Optimism remain market leaders but face increasing competition
• Polygon leverages multi-technology strengths for steady growth
• Manta, Starknet and others differentiate via privacy and zero-knowledge proofs
• Game chains like IMX and payment chains like Lightning focus on vertical scenarios
• Ethereum 2.0 upgrades will further reduce L2 costs

Choosing the right Layer-2 depends on application needs: for high TVL and mature ecosystems, Arbitrum/Optimism; for privacy, Manta/Starknet; for gaming and NFTs, Immutable X; for daily micro-payments, Lightning Network.

Layer-2 is no longer fringe technology but a mainstream path for blockchain adoption.