Layer 2 tokens have had a huge impact on the industry as major projects on this chain have recorded huge leaps in their respective values. L2 is widely used for transfer between adjacent data nodes due to its faster transaction speed and security.
L2 is also referred to as an off-chain network or a new technology built on top of an existing blockchain (layer 1). The main goal is to solve the challenges related to transaction speed and scalability faced by major Layer 1 networks. The ecosystem is dedicated to transforming the industry and expanding to new heights through continuous innovation.
outline:
With the birth of Ethereum, a new ecosystem called Layer-1 blockchain was introduced to the world. Ethereum, with a market dominance of 17.1%, has played an important role in the diversification of the ecosystem by equipping many major blockchains, called the Layer-2 ecosystem.
With a market capitalization of $15.42 billion, L2 is expected to play a major role in future blockchain adoption.
Active addresses for layer 2 tokens have continued to grow, with major tokens hitting record highs this year, indicating growing demand for the ecosystem. Layer 2 currently has over 12 million active users and growing every day.
Additionally, over $13 billion worth of tokens are currently locked by users (TVL). This highlights the strong fundamentals of the project, as many users believe in the future of this technology.
Layer 2 has played an important role in the future of decentralized financial systems. This blockchain technology will play an important role in the future as it allows sensitive data to be stored with the most complex encryption methods for maximum security. People can not only store data, but also use it in their daily lives.
Factors to consider:
Before entering the world of cryptocurrency, it is best to understand some important factors that affect the price action of your chosen token as it can help you make better investment decisions.
Here are some factors to consider when investing:
- Market Capitalization: Commonly called market capitalization plays an important role as it helps investors understand the value of a token in the market.
- Technology: Understanding blockchain technology is important in the cryptocurrency industry because it helps understand the fundamentals of the project, such as consensus mechanisms, scalability, and security measures.
- Adaptation of the network: Blockchain is considered a potential project if significant users use the network as a transaction mode.
- Historical Performance: Analyzing the historical data of a token is very important as it helps to understand the reliability of the project in different market situations.
- Roadmap: This gives you insight into your company’s plans for the year, including upgrades, partnerships, and adoption.
Current market situation:
Despite ongoing setbacks, layer 2 tokens have successfully regained the momentum they once lost. Positively, investors are seasoned and optimistic about the future.
Historical sentiment shows that tokens follow certain patterns and exhibit recurring trends that indicate a resurgence, resulting in the industry recording tremendous growth. The market is currently in a stabilizing phase, which can be seen as a good time for long-term investments.
As the market stabilized, a belief was formed that high-potential projects, especially in the cryptocurrency space, could play an important role in changing the world. Therefore, it attracts more investors willing to participate in this transfusion, ultimately increasing the market value.
Best L2 tokens to look for in 2024:
decision
Arbitrum has become one of the most preferred blockchains in the L2 ecosystem since its launch in 2021. ARB ranks 47th on the CMC list with a market capitalization of $1.36 billion.
It was also one of the first decentralized perpetual exchanges to offer leveraged trading using a non-custodial exchange.
Arbitrum holds about $3 billion in TVL and $1.5 billion in stablecoins, making it a popular choice for the upcoming bull market as investors begin to gain confidence in the project.
The ARB project is the newest project and is expected to hit the $5 target in the upcoming bull cycle.
polygon
It is the leading blockchain on Ethereum Layer 2 with a market capitalization of just over $7 billion. Polygon is one of the leading tokens in the cryptocurrency industry and is a $1.2 billion stablecoin with a TVL of $1.2 billion.
Polygon has partnered with some of the world’s hottest brands like Nike and Starbucks. It solves a major scalability problem in the Ethereum ecosystem, making it an important project for L2.
With the launch of the first zkEVM, the first Ethereum virtual machine (EVM), Polygon has set the benchmark for integrating smart contracts and tools.
Although MATIC’s price is traded at a 73.15% discount, it is an important project in the L2 ecosystem due to its significant impact on the ecosystem.
immutability
Immutable’s primary goal is to provide a safe and secure decentralized infrastructure for developers to create next-generation crypto games connected to the Ethereum mainnet.
Immutable’s current market capitalization is $1.74 billion, but the project is expected to play a significant role in the gaming sector, potentially making it a high-value token in the future.
With the potential to revolutionize the gaming sector forever, IMX is already garnering significant market attention and has a $7 target for the upcoming bull cycle.
dYdX (ethDYDX)
As a permanent exchange on the Ethereum layer 2 blockchain, the project has the potential to increase scalability and accommodate infinite users on the blockchain. We guarantee fast and secure withdrawals and deposits while providing the highest level of anonymity.
DYDX tokens are currently trading at around $3.50, with an 88% discount. In the previous run, the price hit an ATH of $27.78 and is expected to be at the same level in the future run, making it a 10x potential investment for the future.
optimism
Optimison (OP) has a market capitalization of $1.6 billion, with a total value pegged at $1 billion and stablecoins worth over $600 million. Additionally, OP’s platform has over 100,000 daily users.
Optimism follows Arbitrum’s path, resulting in this token receiving significant market attention. Additionally, an airdrop in early 2023 increased the token’s presence in the industry.
This blockchain also stores Sam Altman’s Worldcoin, making it the center of market attraction and representing a strong foundation.
Optimism is a type of project that has the power to integrate and finance third-party development proposals, making partnerships and funding easy. Token is expected to score double-digit scores in the upcoming run to make the watch list.
mantle
Mantle (MNT) has a market cap of close to $1.6 billion, TVL is $24 million and the stablecoin is $5 million. It uses a unique model to extend scalability, helping you provide a better user experience for your users.
Mantle focuses on mass adoption of decentralized governance. All decisions operate on a voting system carried out through the native token $MNT.
This blockchain, which operates in conjunction with Uniswap V3, has a lot of plans for the coming year when it comes to efficiency, making it a potential buy for the upcoming cycle.
Since the price of MNT is currently trading below $1, it is considered a steal. Trading at a discount of just over 14%, the price is expected to hit a new ATH with a $3 target in the coming days.
loop ring
Launched in 2017, LRC has a market capitalization of approximately $300 million. The main goal is to provide users with secure and cost-effective transactions.
LRC requires a cost of only 1/100th of Ethereum, making it an essential blockchain for this sector. Following the integration of ZKRolups, the project now has a capacity of 2,000 TPS.
Loopring price hit a high of $3.83 in its previous run and is currently trading at a 93% discount, but the project has the potential to change the cross-border trading process, making it a high-value token for the future.
Kronos
Launched in 2019, The CRO has a market capitalization of approximately $2.33 billion. The main goal is to facilitate transactions using a custom blockchain.
Cronos is trading at a 90% discount from its previous ATH of $0.9698, and the chain’s TVL is $782 million, making it a coin with high potential for the future.
Neo
The main goal is for people to have the right to vote on upcoming decisions. With a market capitalization of $774 million, the NEO token is expected to hit new highs during the next cycle.
NEO price hit a high of $196.85, with the previous coin losing more than 97% of its value, but the project remains a significant player in the DeFi space given its ability to process 10,000 transactions per second.
Investment Tips:
Blockchain technology is on its way to transforming the world, and it is quite impossible to suppress this change. Cryptocurrencies are constantly evolving and are still in the early stages of adoption.
Layer 2 is considered a revolutionary move in the fintech world because it brings important financial systems to the blockchain.
Here are some investing tips to maximize your returns.
- Diversify your portfolio: It is best to invest your money in a variety of cryptocurrencies to minimize risk and this will also help protect your portfolio.
- Stay up-to-date: Staying up-to-date on industry current affairs will give you ideas on when to stockpile or sell your tokens.
- Trusted Platform: Choose only the platform to buy, sell and store your tokens. Choose a platform with better security features.
- Knowledge: Study the basic and long-term plans of the project to understand the workings of blockchain technology.
- DYOR: Make sure you understand the business you are investing in and research it thoroughly before investing.
Crisis Management:
- Security Risk: Hacking has turned out to be one of the major concerns in the cryptocurrency world as it threatens the security of wallets.
- Market Volatility: The cryptocurrency industry is highly volatile and regulation plays a significant role in volatility as it can trigger massive price increases and decreases at the same time.
- Market manipulation: Pump and dump schemes, insider trading, whale migration, etc. are some examples of such situations.
- Cryptocurrency regulation: Various countries are continuously working on these developments. New laws or changes to existing laws can have a significant impact on prices.
conclusion:
Layer 2 is one of the most important parts of the new face of the decentralized world. Although technology is advancing every day, opening up new possibilities, it is still considered a risky investment for many reasons.
Each of these projects plays an important role in the functioning of this vast ecosystem, providing a variety of solutions related to scalability, security, and mechanisms.
The projects selected in this article were chosen purely based on market capitalization, ranking, trading volume, all-time highs and lows, TVL, and roadmap.
memo:
Understanding the cryptocurrency market requires a lot of patience, dedication, analytical skills and knowledge. This industry is so dynamic that you have to move with calculation and caution. The market shows incredible potential, but also carries significant risks.
Do your research before investing and only invest money you can afford to lose. Because the market is so volatile, we see huge price fluctuations in a short period of time, which can bring good luck to a person, but can also liquidate a portfolio. By fountain.