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Top Layer-2 Coins to Buy

 Layer-2 blockchains are third-party protocols operating on layer-1 blockchains to help solve any of the blockchain trilemma- decentralisation, security, and scalability. They serve as add-ons for the parent blockchain. They can be sidechains, plasma chains, state channels, or rollups. Popular examples are Bitcoin Lightning Network and Ethereum Plasma. The following list consists of top layer-2 coins that you can invest in.

Polygon (MATIC)

 If you are confused about Polygon (MATIC), you possibly remember it as the Matic Network. Polygon was developed in 2017 in India by Jaynti Kanani, Anurag Arjun, Mihailo Bjelic, and Sandeep Nailwal. The Matic Network was rebranded as Polygon in February 2021, about a year after its launch. Polygon was developed to help solve the scalability problem the Ethereum blockchain faces and bring about mass adoption. In essence, the network plans to improve the speed and cut the cost and technicalities of the Ethereum blockchain by providing multiple tools. It also aims to bridge various blockchains on the Ethereum blockchain. Due to being at the forefront of most development in the crypto space- smart contracts, dApps, NFTs, and so on, the Ethereum blockchain has become relatively expensive and clogged. As such, the Polygon network is proffering a scaling solution to this problem by serving as a layer-2 network (an add-on layer) to Ethereum. This would help the blockchain increase and become more secure, efficient, and useful. Polygon is a multi-level network with numerous sidechains. These sidechains are built using the Polygon software development kit (SDK) written in Golang. The SDK is highly flexible, extensible, modular, and compatible with Ethereum. Plasma chains, zero-knowledge (zk-) rollups, and optimistic rollups are the methods that can be used to scale the sidechains when developing them. Sidechains are special blockchains that support numerous DeFi protocols while attached to the main blockchain. This feature makes Polygon likened to Cosmos, Polkadot, and Avalanche. Each sidechain is predicted to run about 70,000 transactions per block.

Like other blockchains, the Polygon platform can be used to make payments, create lending platforms, and develop games, among others. Asides from that, it provides other solutions like Hermez, Avail, Nightfall, Miden, and Zero. Nightfall, Miden, and Zero are still in development. Polygon operates on a proof-of-stake model, which allows users to use their tokens to verify transactions and participate in governance. MATIC is the native cryptocurrency of the Polygon network. It is used in settling and paying for transactions between users in the network. The token helps drive development on the network by serving as rewards to users who provide computational resources and services. As an investor, owning and staking MATIC tokens allows you to vote on network upgrades and fixes. However, your vote is proportional to the amount of MATIC in your wallet. Due to the limited supply of MATIC tokens (10 billion), its value might be positively influenced. With its attributes of providing a solution to the scalability problem of Ethereum and allowing developers to build more user-friendly dApps, its adoption might increase; and with increased adoption and use-cases comes an increase in value. Sushiswap (a DEX exchange), Quick swap, Chain games, Curve, and Ocean Protocol, are all built on the Polygon platform. Although its market cap is reasonably high ($17.6b), it will make a great investment as it is currently trading at $2.57. It is ranked 14th on Coingecko. To buy Polygon (MATIC), head to Binance, Coinbase Exchange, MEXC Global, or Digifinex.

 Loopring (LRC)

 Loopring (LRC) is an Ethereum layer-2 scaling platform that consists of an open-source zk-rollup protocol. It is the first platform to use a zk-rollup protocol on the Ethereum blockchain. Daniel Wang developed it in 2017. Loopring consists of smart contracts and 1zero knowledge circuits. These are useful in developing automated market makers, payment apps, and decentralized exchanges that have high-throughput. Also, it can be used to develop protocols, infrastructures, and user-friendly DeFi. Besides that, the platform has a secure native exchange where trading can be done very fast without central authority and gas fees. It can bundle transactions together for efficiency because of the zk-rollup proofs.

Additionally, this allows it to run certain computations off the Ethereum blockchain. It performs operations like trading, providing liquidity, swapping, and making payments relying on the security of the Ethereum blockchain. Loopring features an on-chain data availability (OCDA) protocol that makes its transactions faster. Also, it has a system of order rings, order miners, and order sharing that provides instant liquidity. It boasts of about 1000x the throughput of the ETH blockchain with a reduced transaction cost that is about 1/100th that of Ethereum. When compared to the ETH blockchain, it verifies transactions faster with less cost due to requiring fewer data. It only uses a smart contract when validating the final cryptographic proof. It requires less computation because it doesn’t pull data from the main network. The loopring protocol can help drive increased adoption of the Ethereum blockchain as it will increase efficiency. LRC is the native token of the platform. It is used in powering the platform’s operations. To create an exchange on loopring, you need to lock over 250,000 LRC, allowing you to use the on-chain data proofs. Moreover, to run an exchange that won’t have this feature, you need about 1 million LRC. Your deposit would be confiscated and redistributed to users who lock theirs if you manage your exchange poorly. LRC serves as a reward token for zk-rollup operators and liquidity providers. Also, it can be staked to earn from the trading fees paid to the network. Seventy percent of the trading fees are allocated to users who stake their tokens, 20% is kept for the platform’s decentralised autonomous organisation, which monitors how the pool’s funds are spent. The remaining 10% is burnt. This burning event reduces the amount in supply and consequently helps drive the price upward. It has a total supply of 1.4 billion, with 1.2 billion currently in circulation. It is ranked 64th with a market cap of $2.5b. It is currently trading at $2.04 and reached an all-time high of $3.75 in November 2021. It is listed on Binance, Coinsbit, Kraken, and the likes.

 These coins provide a specific solution to the layer-1 blockchain they are serving, and as long as they keep doing this, they will keep having value.

The post Top Layer-2 Coins to Buy appeared first on Coin Journal.

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5 Reasons to buy Solana over Ethereum

While both cryptocurrencies have nice worths, their values go beyond being cryptocurrencies to their underlying blockchains. Solana (SOL) and Ethereum (ETH) power and serve as the native coins of two giant blockchains. Although they have great similarities, they have distinct differences. As a first mover, the Ethereum blockchain experienced massive growth for its responsibility for decentralised applications. Similar to this was its involvement in creating digital assets (NFTs). However, this has created worthy competitions, one of these being the Solana blockchain. And while the founders of Solana believe there can be some form of a beneficial relationship, crypto enthusiasts believe it’s the „Ethereum killer.“

 Solana was created two years after Ethereum by Anatoly Yakovenko to resolve the problem of scalability existing among the blockchains of that time. It sought to overcome the resistance faced with censorship also. The Solana blockchain is a third-generation distributed ledger that promises efficiency using fewer nodes. Its whitepaper and testnet were released in 2018, while a beta of the mainnet was launched in March 2020. The blockchain, unlike the ones before it, was built on eight key technologies, including a proof-of-history mechanism, a Tower BFT, a block propagation protocol (Turbine), a unit for transaction validation optimization (Pipelining), a storage unit for its ledgers (Archivers), a processing unit for smart contract transactions (Sealevel), and a protocol that shares data across the network (Cloudbreak). The technologies served as the basis of the innovation known as the Solana blockchain today. However, this alone cannot convince you to choose it over Ethereum; so, consider the following.

Consensus mechanism

Unlike Ethereum, the Solana blockchain uses Tower Byzantine Fault Tolerance (BFT) (a modified PBFT) to secure its operations. It is incorporated with a delegated proof-of-stake (DPoS) that employs a voting and reputation system in securing and running the network. Asides from this, it uses the proof-of-history novel approach. This allows the network to add time to its ledgers, thereby verifying transaction time. It also links messages from nodes together, allowing chronological validation of blocks. This implies that the consensus process becomes faster, and transaction latency and messaging overhead are reduced. Similarly, each node can independently verify the validity of transactions.

Room for growth

The blockchain still has excess growing potential giving that it can also interact with smart contracts. It currently houses several projects cutting across dApps, DEXs, DeFi platforms, and automated market makers (AMMs). The Solana ecosystem boasts of numerous wallets, oracles, stablecoins, and infrastructures. It entered into the NFT space with the launch of the Degenerate Ape Academy. This contributed to its native token experiencing over a 10,000% increase in price. It has over 400 dApps projects on its network. Notable examples are Serum, Audius, Raydium, Open Ocean, DeFi Land, Metaplex, and Francium. Its coin is currently trading at $174.35, which is over $3500 less than Ethereum. Solana is still growing- project-wise and value-wise. Investing in it at this point would be ideal.

Scalability and speed

The blockchain also solves one of the blockchain trilemmas. It has gained massive traction and adoption due to its scalability and speed. Unlike Ethereum, it is fast and scalable. While Ethereum still struggles with 15 to 45 transactions per second (TPS), Solana is already doing 50,000 TPS and can do more. In context, it is 4000x faster than Ethereum. This throughput also gives it an edge with transaction cost; the more transactions you can run, the lesser the cost to run them. So, it charges lesser than Ethereum for its transactions- around $0.00025 per transaction. The diverse technologies behind the blockchain can maintain its speed and efficiency without a layer-2 blockchain. It can maintain its target throughput and speed as more projects are set up in the ecosystem. Its low processing power and proof-of-history model is built to be efficient and secure. Due to the high fees and congestion of the Ethereum blockchain, it is the best alternative.

Environmental impact

The question about how friendly cryptocurrencies are to the environment has hampered their mass adoption. Everyone is advocating for eco-friendly projects. Bitcoin and Ethereum use a mining model (proof-of-work) that adversely affects the environment. However, Solana is set to be energy efficient with its novel consensus mechanisms. This is because its mining model requires little computing power. Validators use their native coin (SOL) in providing computational services and operating the network. Solana has also developed a bridge that allows the transfer of assets from Ethereum to Solana; this would help reduce the use of Ethereum, thereby reducing its environmental impact. By far, Solana is a greener alternative to preceding blockchains.

SOL

This is the native token of the Solana blockchain and has several use-cases. It can be delegated to a validator or staked for rewards. It can also be used to make payments, settle transaction fees, access the projects on the blockchain, and as a governance token. Out of the SOL initially minted, 60.4% is under the care of the founders, Solana Foundation, and locked investors. 1.6% was sold at auction, and 38% was allocated to the community. Of the 508.2 million total supply, 309.3 million is in active circulation. It is currently ranked 5th with a market cap of $53.9b. SOL gives an annual percentage yield of over 5% when staked.

 Solana has the third-largest futures market and is tops in TVL, users, and derivatives market. Also, it has very attractive features. However, it should be noted that the Ethereum blockchain has more decentralised applications and more stability. This is negated by the Solana blockchain’s speed, scalability, and transaction cost. As investors, developers, and crypto enthusiasts are looking for an alternative to Ethereum; they look to Solana as it offers virtually everything the Ethereum blockchain offers and more at less cost and high speed. There is a wide gap between the prices of ETH and SOL, but it would be smarter to buy 15 SOL than 1 ETH. However, anything you decide to do, be smart, do your research, and do the dollar-cost averaging. Remember that the crypto space is highly risky and volatile, so only invest the capital that you can let go peradventure you hit loss; invest wisely.

The post 5 Reasons to buy Solana over Ethereum appeared first on Coin Journal.