Top 10 Layer-2 Blockchains by Market Cap in May 2025

Since its proposal in 2008 as a decentralized payment network, blockchain technology has come a long way and is now powering various applications, such as DeFi , GameFi, NFTs, the metaverse, and Web3. As it ventures into mainstream adoption, the issue of scalability becomes increasingly important.

Even though Ethereum and Bitcoin are critical Layer-1 networks, they have limited throughput and lag behind traditional systems regarding transaction processing speed. Bitcoin's network processes about 7 transactions per second (TPS), while Ethereum's Layer-1 handles approximately 15 TPS as of 2025. These figures are significantly lower than traditional systems like VISA, which can handle around 1,700 TPS.

This article examines how Layer-2 solutions can enhance blockchain TPS, the most promising Layer-2 projects in 2025, and how they aim to address the blockchain trilemma.

What are Layer-2 protocols in crypto? 

Layer-2 solutions are scaling solutions essential for improving the performance and scalability of Layer-1 blockchains, such as Ethereum. These protocols operate on top of the primary blockchain, significantly reducing congestion, lowering transaction costs, and increasing throughput.

How do Layer-2 solutions work?

Layer-2 networks operate on the off-chain transaction processing principle, resulting in a consolidated summary transaction on the main chain. This method reduces network congestion, processing time, and transaction costs.

Using Layer 2 protocols, transactions are diverted off the main blockchain and processed separately. They act like a dedicated traffic management system. This process reduces congestion on the blockchain, leading to faster transactions, lower fees, and increased throughput.

Types of Layer-2 Solutions

Layer-2 solutions act as express transaction lanes, bypassing traffic jams and congestion on Layer-1 blockchain networks. Various types of Layer-2 solutions are reshaping the blockchain landscape.

— Optimistic rollups

Optimistic Rollups are a popular scaling solution for Ethereum's Layer 2 network. They assume transactions are valid unless proven otherwise, reducing verification costs and allowing for faster processing.

— Zero-Knowledge Rollups (zk Rollups)

Zk Rollups combines transactions into a single proof for enhanced privacy and efficiency. These have some key features, including enhanced privacy and scalability. Zk Rollups also have minimal computational strain on the blockchain, making them popular in DeFi and NFT applications.

— Ethereum Plasma Chains

Plasma chains are Ethereum layer-2 networks that act as specialized sidechains connected to the Ethereum mainnet. They offer faster transactions, lower fees, and a distinct approach compared to rollup-based solutions.

— Validium

Validium is a layer-2 scaling technology that moves transactions off-chain for validation. This ensures security through cryptographic proofs without compromising on scalability. It's perfect for applications that prioritize speed and