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Multi-chain solutions (layer 2 crypto) can prove good investments if you make the right coins a part of your portfolio. Layer 2 crypto is a major gain class and investors keep looking for it.
Last updated Aug 2, 2022 at 1:52 AM
Posted Aug 2, 2022 at 12:00 PM
What is layer 2 crypto?
Layer 2 is a secondary protocol built to solve the scalability issues of the core chains. To solve the scalability trilemma of classic blockchains, an additional layer of layer 2 protocols is added to make the network fully achieve scalability and ensure interoperability. These protocols have native coins worth investing in. Here are the top three Layer 2 crypto available:
Top 3 layer 2 crypto:
Polygon,the most famous layer 2 crypto, is known for scaling Ethereum. Solving the scalability issues of Ethereum is the foremost achievement of the polygon. Ethereum is extremely secure and decentralized; however, it is slower and can process only 12 to 15 transactions per second. Since there’s high traffic on the network, transactions have to wait in the queue. To prioritize the transactions, traders have to pay more fees.
Polygon Matic adds an additional layer of protocol to process the transactions in the PoS model and then add them to the Ethereum mainnet. This makes Polygon a faster, cheaper, more secure platform.
Just the DeFi domain of Polygon has a TVL (Total Value Locked) of $1.78 billion. The all-time high of the TVL in DeFi is $10 billion but under the bearish market, it has drifted down to this number. The value locked in billions states the importance of this chain and so important is its native coin $Matic.
Matic has a market cap of over $7 billion. Matic has surged over 230% since its bottom while Bitcoin has gained only 35%. This is a huge recovery and investors love this coin for its insane positive volatilities.
Polygon Matic TradingView
2. Loopring LRC
Loopring is a decentralized order matching and order settlement protocol on the Ethereum chain. LRC is the Ethereum-base layer 2 crypto of Loopring protocol. Most of the TVL of this protocol is on DEXs and it is designed to build decentralized exchanges.
LRC has gained over 50% since the bottom of the current cycle. The price is recovering slowly in a bullish channel and the coin might soon hit the resistance level of $0.50. The chart shows a pullback from the resistance level to the middle support line. The relative strength index RSI is mimicking the moves of the price of the token. MACD is turning bearish again, but it will reach a new higher low and start the slow surge again.
The market cap of LRC is $581 million; 97% of the total supply is already in circulation. LRC is second on our list of layer 2 crypto coins to invest in now.
3. OMG Network
OMG Network, also called OmiseGo, is a layer 2 scaling solution for the Ethereum mainnet. This non-custodial chain uses a side chain structure based on a novel solution called MoreViable Plasma. OMG Network combines several transactions off-chain to ensure maximum scalability and then verifies all those transactions as a single on the Ethereum mainnet. From the speed of 12 to 15 transactions per second of Ethereum, the OMG network has increased the speed of the network a thousand times.
OMG is the main coin of the OMG chain. The coin is struggling to break the local resistance of $2.335 to touch the first target of $2.87. The OMG Network price today is $2.30 with a 24-hour trading volume of $56,259,987. The current CoinMarketCap ranking is #110, with a live market cap of $322 million.
OMG has a circulating supply of 140,245,398 OMG coins. All the coins are already in circulation. The Relative Strength Index on the chart has just entered the oversold condition, which has pushed the price down to its current trading level.
Layer 2 crypto is actually a layer to the main layer 1 blockchains. These coins perform as well as their chain, which is famous among developers. If a chain has massive adoption, its token is more likely to perform better. All these layer 2 crypto are the native tokens of layer 2 protocols that use the Ethereum root chain.