Layer 2 (L2) Coins list by Market Cap and Volume

If explained in a quick way, L2 tokens are the native digital currencies of Layer-2 projects or networks that utilize existing blockchains to enhance transaction speed, lower costs, and increase scalability. L2 here refers to any off-chain system, network, or technology built on top of a blockchain (known as an L1 network) that aims to “nurture” the capabilities of the base network.

Layer 2 coins inherit the security of the underlying blockchain, with transaction data verified and confirmed by it. Plus, they aim to increase transaction throughput and reduce fees without compromising decentralization or security.

Many people who make their first steps into the crypto world and L2 platforms wonder whether these networks are safe or not. However, just because base Layer 2 coins and projects are a relatively new development in blockchain and cryptocurrency, there is nothing solid about their security and safety.

That's why users should be cautious and research thoroughly the advantages/meaning of every platform and token before investing significant funds. In addition, many projects are building L2 solutions on a daily basis, which can lead to varying quality and safety. But, as the technology matures, it's likely that coins in the top Layer 2 blockchain list will gain widespread adoption and provide strong security for cryptocurrency users.

At a high level, L2 protocols and solutions generally consist of two main components: a network that processes transactions and a smart contract on the underlying blockchain that resolves disputes and achieves consensus on the state of the top Layer 2 crypto networks by anchoring them to the base blockchain.

L2 networks handle the rapid execution of transactions and computations. While their methods of achieving high throughput can differ significantly, they all share a common feature: when settling on the base chain, L-2s must provide some form of cryptographic proof to the chain, ensuring the integrity of the proposed state changes.

So, why exactly do we need the best layer 2 crypto platforms? L2 blockchains appeared in the market just because popular L1 blockchains like Bitcoin and Ethereum couldn't handle the high demand for transactions efficiently. When activity spikes, these networks can get congested, which can lead to high transaction fees. This, in turn, makes smaller transactions impractical and nerve-wracking.

The best Layer 2 crypto coin`s faster and cheaper scalability solutions enable new use cases like tipping and microtransactions. These solutions boost transaction throughput without compromising the original blockchain's decentralization or security features.

If we take a look at the architecture of the blockchain, we can see that it consists of four main parts: L0, L1, L2, and L3. The same goes for crypto exchanges – apart from the Layer 2 crypto coins list, you can also find and buy L1 and L3 coins. Blockchain technology can be likened to a multi-story building, where each “floor” has a distinct role:

• L0, known as the network layer, forms the foundation and manages fundamental communication protocols.
• L1 serves as the core structure.
• L2 enhances functionalities.
• L3 supports applications built upon these functionalities.

In crypto Layer 2 varies from the others in vital aspects like scalability solutions, consensus mechanisms, transaction price, and security features.

The blockchain scalability trilemma suggests that blockchains don’t have scaling solutions that would maintain security and decentralization. Instead, tradeoffs are needed among these three features. L2 solutions are based on the idea that blockchains have too many tasks. By sharing the transaction processing load, L2 solutions aim to tackle these scalability challenges.

The top Layer 2 coins enhance blockchain scalability by creating an additional protocol “coating” on top of existing blockchains like Ethereum and Bitcoin. This approach reduces the main net's workload while preserving the security and decentralization standards of the underlying blockchain and L2 tokens.