5 Best Layer 2 Crypto to Buy in Q4 2023
Some potential layer 2 crypto investments include Polygon (MATIC), Inspect (INSP), Arbitrum (ARB), Loopring (LRC), and Immutable X (IMX).
With hundreds of new tokens launched every month, and many being prone to strong market volatility, it is hard to find layer 2 cryptocurrencies with growth potential to invest in.
According to Coinranking, as of the time of writing, the current market cap for layer 2 coins is over $10 billion. Not only that, their trading volume within 24 hours is over $1billion. This simply reveals that layer 2 coins are growing bigger than ever, and enthusiasts and newbies are genuinely looking for Layer 2 crypto with amazing potential to buy.
But What is Actually Layer 2 Blockchain?
According to Binance Academy, Layer 2 is simply referred to as the secondary framework or protocol that is built on top of an existing blockchain system. Some other experts define it as the augmenting network that helps decentralized apps on a slow chain to attain faster and cheaper transactions.
From the inception of blockchain technology, it has been a fundamental rule that — security, decentralization and scalability are properties that blockchain has to satisfy for it to be perfect. Earlier founders and cryptographers carried out several researches and yet, achieving the aforementioned properties at-a-go for a project was still a struggling race. It’s a case of — if a blockchain focuses on two properties, let's say decentralization and security, then the blockchain has to compromise scalability and vice versa. Well, thanks to the advent of layer 2 network especially the Ethereum layer 2. From all indications, it’s constituting the most in the layer 2 ecosystem.
Hence, we can say that layer 2 coins are digital currencies that work on an existing blockchain to facilitate faster transactions and make it happen at a cheaper cost. In fact, it’s fair to imagine layer 1 as a clustered highway and layer 2 as an alternative pathway to ease congestion.
What are the outstanding benefits of layer 2 blockchain?
Here are the five major ones;
I) It facilitates faster transactional processes.
II) It enhances privacy.
III) It lowers transactional fees.
IV) It increases scalability.
V) It improves security.
Use Cases Application of Layer 2 Blockchain Solution:
For Micropayments: Layer 2 scaling solutions can enable the process of micropayment to run at a much lower cost than the regular on-chain solution. In other words, L2 can be adopted for applications that are used for Pay-per-use services because it facilitates lower cost of transactions.
For Supply Chain Management: Considering the features that enable it to process off-chain transactions at lower cost and in a scalable format, it is crystal clear that layer 2 blockchain is more efficient and can be used to secure supply chain management.
For Gaming: In gaming, a Layer 2 scaling solution can be leveraged to boost the transaction productiveness of gaming apps — enabling real-time gameplay and also reducing the cost of in-game transactions and a lot more.
For DeFi( Decentralize Finance): Layer 2 blockchain solution can considerably boost the transaction yields of DeFi applications. In fact, they can also strengthen the privacy and security of DeFi transactions.
For Non-fungible tokens (NFT): Do you know that the layer 2 blockchain solution can make the creation and trading of NFT possible at a much lower cost and at a faster transaction time compared to the on-chain blockchain solution? In fact, it can unlock the hidden use cases of NFTs and other digital collectables.
What Are The Potential Driven Layer 2 Crypto to Buy in Q4 2023?
Nobody wants to invest in a project with little or zero potential. The result is to secure a project that will yield positive results in the long term. So, if you are looking for layer 2 cryptocurrencies with strong potential to bag? Well, here are a few out of many potentially driven Layer 2 cryptocurrencies out there.
Note: This list is not arranged based on hierarchy or in chronological order.
#1 Polygon (MATIC):
Polygon has proven to be one of the famous Layer 2 crypto to add to your portfolio. It is known to be “ the value layer of the internet.”
Polygon is the number one Ethereum layer 2 blockchain that uses an adapted version of plasma with PoS-based side chains to provide a transaction speed of about 7,000 TPS compared to Ethereum's 15 TPS.
MATIC, its native token is used for participation in network governance, payment of operation fees and staking. This Layer 2 crypto has a TVL of about $893 million, with over 37,000 applications running on its chain as of the time of writing.
One of Its unique advantages that sets it apart is its framework for building interconnected blockchain networks, allowing assets to move seamlessly between different networks.
More so, you can trade MATIC on various exchanges, including Binance, Poloniex, Coinbase, Digifinex, and Huobi Global.
Native Token: MATIC
Market Cap: $6.33 billion
Total supply: $10 billion
#2 Inspect (INSP):
Inspect is one of the best layer 2 cryptocurrencies that’s loaded with so many scaling solutions to offer in the crypto market. Aside from the fact that it’s an interesting investment opportunity among so many, have it in mind that Inspect is a relatively new Layer 2 solution that instantly turns Twitter (X) into a Web3 platform.
In a very short while since its launch, Inspect has experienced significant growth and success with an active community of over 150,000 members, and a market cap of about $1.16 million at launch.
Because Inspect has over 75,000 MAU web applications and 30,000 WAU chrome extensions, It allows you to seamlessly track, engage, explore and swap crypto assets, NFTs and DeFi projects directly all within your Twitter feed.
Inspect has a unique cross-chain compatibility that ensures a seamless user experience across various blockchain networks, while its robust verification process guarantees asset authenticity and security.
The Inspect ecosystem has its native token, INSP. And it is used to incentivize user engagement, to grant access to exclusive features, and to participate in governance.
More so, you can trade INSP on Pancakeswap, Uniswap and more.
Native token: INSP
Market cap:$1.16 million
Total supply: $1 billion
#3 Arbitrum (ARB) :
Arbitrum is another potentially driven layer 2 crypto that has shown significant growth in 2023.
Primarily, Arbitrum is designed to address the issue of congestion on Ethereum through its high transaction speed of about 40,000 transactions per second (TPS) compared to Ethereum’s 15 TPS. Do you know that since its launch in March 2021, Arbitrum has been recorded to be the most used Ethereum layer 2 roll-ups? Arbitrum’s potential in layer 2 scaling solutions can’t be overemphasized. By the act of bundling multiple transactions into a single transaction, Arbitrum reduces the load on the Ethereum network thereby enabling faster and more cost-effective operations.
As of the time of writing, there are over 435 protocols active on the Arbitrum chain and it currently boasts of TVL (Total value locked) of over $2 billion — this simply reveals the huge number of users who perceive this protocol.
ARB, its native token – is used for transaction fees, and voting on proposals. You can seamlessly buy this Layer 2 crypto are Huobi Global, Poloniex, Binance, Gate.io, and DigiFinex.
Native Token: ARB
Market Cap: $1.47 billion
Total supply: $10 billion
#4 Loopring (LRC):
Loopring is another potential-driven layer 2 crypto with a revolutionary impact. While it has been in existence since 2017, it’s interesting to know that its platform aims at securing transactions, providing lower cost and boasting of processing up to 2,025 TPS at the time of writing. According to research, Loopring were capable of doing just two to three TPS when they started, but leveraging zkRollups, made Loopring more scalable.
Loopring currently boasts of a TVL of $77 million and about 96.87% circulating supply. One of its unique features is that it has an innovative native wallet powered by a social recovery mechanism, thereby, users don’t need to store seep phrases to recover their accounts. You can seamlessly buy LRC at these exchanges: Binance, Kucoin, Huobi Global and OKX.
Native token: LRC
Market Cap: $248 million
#5 Immutable X( IMX):
Here is another potential-driven layer 2 crypto with strong potential. Several research studies have proven that Immutable X is one of the first zk-rollups for NFT on the Ethereum blockchain. While its scaling solution is specifically designed to improve the scalability of Non-Fungible Tokens (NFTs) and web3 games built on the Ethereum network, keep it in mind that the Layer 2 scaling solution reduces congestion on the Ethereum network by batching together hundreds of separate transactions into a single zero-knowledge proof known as ZK-STARK and processing the transactions off-chain.
Immutable X offers a fast transaction validation process of up to 9,000 NFT transactions per second; Thus, attracting NFT projects looking to benefit from the network’s unmatched speed, scale and flexibility.
IMX, the native token can be used for payment, staking rewards and governance. Some of the top exchanges to buy the $IMX token are Poloniex, Binance, Coinbase, Upbit, and OKX.
Native token: IMX
Market cap: $1.42 billion
Total supply: $2 billion
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