Layer 2 scaling solutions have emerged as the definitive answer to Ethereum’s throughput limitations, processing billions in daily volume with fees 10-50x lower than mainnet.
Arbitrum: Technical Leadership
Arbitrum leads L2 by TVL through technical innovation. The Nitro stack dramatically improved performance. Stylus enables development in Rust, C, and C++. Orbit allows custom L3 deployment. The ecosystem hosts GMX, Radiant, Camelot, and more.
Optimism: Collective Vision
Optimism differentiates through governance innovation. RetroPGF rewards public goods. The OP Stack powers Base and other chains in the Superchain. Bicameral governance balances efficiency with legitimacy.
Impact on DeFi
Lower costs enable new protocol designs: more frequent rebalancing, smaller positions, real-time updates. Cross-chain liquidity solutions address fragmentation. L2s have become production infrastructure, not experimental technology.
For DeFi participants, understanding L2s is now foundational to navigating modern decentralized finance.