The start of a new month has brought renewed fervor from the cryptocurrency market as the price of Bitcoin (BTC) rose steadily from a low of $ 43,537 on February 28 to a high of $ 49,200 during the first hours of trading today.
As traders get excited about positive movements in the market and look to reopen positions, The growing use of DeFi continues to drive up fees on the Ethereum (ETH) network, highlighting the major Layer 2 (L2) protocols offering working solutions.
Three protocols that have emerged as the main contenders for L2 with working platforms are Polygon (MATIC), xDai (STAKE) and Loopring (LRC). Each offers its own unique Layer 2 approaches to help facilitate high traffic on the Ethereum network.
MATIC / USDT
Polygon, formerly known as Matic, it was officially launched as a layer two aggregator for Ethereum on February 9 as a way to offer an interoperability protocol for the network.
Since the enthusiasm for the makeover began, the price of MATIC has risen by 400% from $ 0.05 to an all-time high of $ 0.245 on March 1. The growing enthusiasm for the launch of the Aavegotchi Mainnet (GHST) on March 2 has also brought a boost of attention and business volume to MATIC.
Aavegotchi was one of the first projects to move to the Polygon network and other projects are likely to join the launch of your mainnet on the web goes smoothly.
MATIC also got a boost on February 26 when ad that the gaming giant Atari would integrate Polygon to “bring its NFT and token products to Layer 2”, with him launch “of the first EOS-Polygon cross-chain bridge”, which was made in partnership with pNetwork (PNT).
XDAI / USDT
xDai is another layer 2 solution that has caught the attention of investors in recent weeks. The xDai chain (STAKE) is a stable payment blockchain created by the POA network, an open source public sidechain of Ethereum that offers a framework for smart contracts.
STAKE is designed to be a multi-chain participation token that validators and delegates offer as a guarantee to participate in the consensus mechanism and receive participation incentives for block production. The objective of the xDai platform is to offer fast and cheap transactions on the Ethereum network.
Since trading at a low of $ 7.50 on January 2, the STAKE price increased 500% to a new all-time high of $ 43 on February 21 before coming under pressure alongside the broader crypto market.
A scroll through the project’s Twitter feed shows several recent partnerships and integration announcements that have helped drive STAKE higher in recent weeks.
Notable mentions include an integration with the Binance Smart Chain (BSC) that allows users to move funds from Binance to xDAI using a bridge from BSC to xDai, as well as the announced migration of the promising Bao Finance (BAO) to the xDai network.
LRC / USDT
Loopring is a layer 2 solution that specifically focuses on creating decentralized cryptocurrency exchanges (DEX).
One of the main sources of congestion on the Ethereum network is the increasing activity of the most popular DEXs such as Uniswap (UNI) and SushiSwap (SUSHI). A separate sidechain made specifically for exchange operations could help ease network congestion and this is what Loopring aims to provide.
The overall goal of the Loopring protocol is to combine the advantages of decentralized exchanges with the liquidity and order book management offered by centralized exchanges to help increase the efficiency of order execution and improve the liquidity of the DEX ecosystem.
Since January 2, LRC has increased by 430% from $ 0.165 to a high of $ 0.88 on February 12.
After falling to a low of $ 0.46 on February 28, the LRC price rallied 30% after advertise that the Loopring exchange added multiple WBTC / Stablecoin pairs, offering “6 New Ways to Trade WBTC on Ehtereum Layer 2”.
VORTECS ™ data from Cointelegraph Markets Pro began to detect a bullish outlook for LRC on February 28, ahead of the recent price surge.
The VORTECS ™ score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements, and trading activity. Twitter
As seen in the graphic above, The VORTECS ™ score for LRC peaked at 73 on February 28, just as the price started with a 30% rally to $ 0.59.
The continued increases in the price of Ethereum, which rose again above $ 1,500 on March 1, will only exacerbate the pain felt by traders trying to use popular DeFi protocols on the network.
The amount of gas required to conduct basic transactions, as well as the price of these fees, will continue to drive users to try the alternatives offered by Layer 2 solutions, and Polygon, xDai, and Loopring are three well-positioned protocols to capitalize on this trend. .