Layer 2 protocols

Current layer 1 blockchains have limited scalability and privacy. In fact, layer 1 blockchains will remain the bottleneck for scaling Web 3 applications. Current layer scaling solutions include sidechains and on layer 2 state channels, optimistic rollups and zero knowledge rollups. In 2021, the adoption of the first layer 2 protocols started. Best known are the Lightning network on Bitcoin and Ethereum scaling solutions such as Optimism, Arbitrum, Starkware & Polygon.

An overview of the layer 2 blockchain ecosystem

All layer 2 blockchain protocols