The number of layer-2 (L2) networks on Ethereum is increasing, with almost 30 different networks deployed to date. These second-layer protocols aim to scale the network by moving some computational processes off Ethereum, resulting in cheaper and faster transactions for users. L2 networks have become economies of their own, collecting billions of dollars worth of digital assets in locked-up deposits.

The two main categories of L2 networks are optimistic rollups and zero-knowledge (ZK) rollups, with optimistic rollups currently dominating the space. Arbitrum is the largest L2 network with a total value locked (TVL) of $5.82 billion, while Optimism is the second-largest with a TVL of $2.42 billion and open-source source code.