• Ethereum Layer-2 tokens are enjoying an incredible rally despite the still bearish environment in the financial markets.
• The native token of the Layer-2 project Optimism (OP) has been one of the best-performing tokens in the crypto markets since the start of 2021, reaching its all-time high of $3.20.
• There might be a new narrative forming around the Layer-2 ecosystem and its promising future.
Ethereum Layer-2 Token Rally
The cryptocurrency market is currently seeing an incredible run for Ethereum Layer-2 tokens, such as Optimism (OP), Loopring (LRC), ImmutableX (IMX), and Polygon (MATIC). This bullish trend comes despite a bearish market environment in traditional finance markets.
Optimism’s Native Token OP Reaches All Time High
The native token of the Layer-2 project Optimism (OP) has been one of the best performing tokens in crypto markets since 2021 started, reaching its all time high of $3.20 – up 230% from last month. Other Layer-2 tokens like Loopring (LRC) and ImmutableX (IMX) have also seen increases – 57.5% and 150% respectively – due to their respective partnerships with Protocol: Gemini and blockchain for gaming built on Layer-2 platform.
Reason Behind Incredible Run for Layers 2 Tokens
It is difficult to pinpoint exactly what sparked this recent wave of interest in Ethereum’s layer 2 scaling solutions, however there may be several contributing factors at play here including increasing equity market rallies, increased adoption rates, positive news from projects within this space, as well as an overall growth narrative being formed around this particular sector within crypto space.
Layer 2 Scaling Solutions Overview
Layer 2 refers to various scaling solutions that operate on separate blockchains outside of Ethereum mainnet which extend its network capacity by taking multiple transactions offchain and bundling them into one before sending them for verification back onto Ethereum mainnet thus reducing gas costs associated with it when compared to executing everything on mainnet level at once.
One such example is optimistic rollup solution called Optimism whose native token OP has seen tremendous success lately as mentioned earlier but other alternatives include zero knowledge rollup Loopring or ImmutableX which is blockchain dedicated towards gaming applications built on top of layer 2 protocol or Polygon which recently announced their upcoming release of zero knowledge EVM virtual machine scaling solution among others.