Who’s Dominating Layer 2? Top 10 Layer 2 Blockchain Development Companies in 2025

The blockchain industry has undergone a remarkable evolution, and nowhere is that more evident than in the explosive growth of Layer 2 solutions. As scalability challenges continue to pressure Layer 1 networks like Ethereum, the demand for efficient, secure, and cost-effective Layer 2 architectures has never been higher. From rollups to state channels, Layer 2 protocols are redefining how decentralized applications achieve scale without sacrificing decentralization or security.

Yet, technical innovation alone does not fuel progress. Behind the rise of Layer 2 are the blockchain development companies designing, building, and deploying these complex systems. This article dives deep into the top 10 Layer 2 blockchain development companies to watch in 2025, highlighting their contributions, key projects, and strategic influence shaping the future of Web3 infrastructure.

Blockchain App Factory

Pioneering Comprehensive Layer 2 Solutions Globally

Headquartered in India with a global client base, Blockchain App Factory has positioned itself as a heavyweight in the blockchain development sector—and its Layer 2 capabilities are among the most robust in the market. Founded in 2017, the firm initially gained recognition for token development and blockchain integration services but swiftly expanded into building scalable Layer 2 architectures.

Layer 2 Expertise

Blockchain App Factory’s Layer 2 services span diverse technologies including:

• Optimistic Rollups: Helping clients build decentralized applications that leverage rollups for near-instant transactions and lower gas fees while maintaining Ethereum’s security guarantees.
• zk-Rollups: Developing solutions that bundle thousands of transactions off-chain with zero-knowledge proofs for high throughput and privacy.
• State Channels: Assisting projects with instant, low-cost micropayments and gaming interactions through state channels that settle only the final state on Layer 1.

Notable Projects & Impact

One standout project was the integration of zk-Rollups into a DeFi platform that previously suffered from prohibitive transaction costs during bull markets. By migrating core operations to Layer 2, Blockchain App Factory enabled the platform to reduce user gas costs by over 90% while maintaining robust security. Similarly, the firm worked with NFT marketplaces to integrate Optimistic Rollups, enabling bulk NFT minting and faster trading while preventing network congestion.

Why They Stand Out

Blockchain App Factory’s strengths lie in:

• Deep technical expertise across multiple Layer 2 stacks.
• End-to-end services, from architecture design to smart contract audits.
• Ability to bridge enterprise demands with decentralized infrastructure.
• Global team that stays ahead of emerging standards like EIP-4844 (proto-danksharding).

As Layer 2 becomes mission-critical for decentralized applications, Blockchain App Factory is likely to remain a go-to partner for startups and enterprises aiming to deliver scalable blockchain solutions in 2025 and beyond.

Matter Labs (zkSync)

Scaling Ethereum Through Zero-Knowledge Magic

Few companies have garnered as much attention in Layer 2 circles as Matter Labs, the creator of zkSync. Established in 2019, Matter Labs has become synonymous with zk-Rollups—a technology that compresses hundreds of transactions into succinct cryptographic proofs, enabling ultra-fast and cost-efficient settlements on Ethereum.

zkSync’s Architecture

At the heart of their ecosystem is zkSync Era, a zkEVM-compatible rollup that lets developers deploy existing Ethereum smart contracts without code modifications. This compatibility accelerates adoption, letting DeFi protocols, NFT marketplaces, and even gaming platforms leverage high throughput and minimal fees.

• Transaction Costs: zkSync has achieved fees as low as a few cents per transaction.
• Throughput: Capable of handling thousands of transactions per second, a massive leap from Ethereum’s ~15 TPS.
• Security: Inherits Ethereum’s security through cryptographic validity proofs.

Real-World Adoption

Leading DeFi protocols like Curve Finance and Uniswap have explored or integrated zkSync for Layer 2 deployment. NFT projects have also begun using zkSync to deliver cheaper minting costs and faster user experiences, which is critical as digital collectibles grow more mainstream.

Funding & Ecosystem

Matter Labs raised over $200 million from investors including a16z, Dragonfly Capital, and Lightspeed. They’re building a vast ecosystem fund to attract projects to zkSync, ensuring ongoing innovation and developer engagement.

StarkWare

The Titans Behind Starknet and Cairo

If zk-Rollups have become the future of Layer 2, StarkWare is one of its principal architects. Founded in 2018 in Israel, StarkWare pioneered the use of STARK proofs—cryptographic proofs that, unlike SNARKs, don’t require trusted setups and scale extremely well for complex computations.

Starknet and Cairo

StarkWare’s flagship product, Starknet, is a general-purpose Layer 2 network that allows developers to build dApps using Cairo, their custom programming language designed for writing provable computations.

• STARK proofs: Provide scalability and security without cryptographic traps like trusted setups.
• Transaction Speed: Starknet has demonstrated significant throughput gains over Ethereum.
• Composable dApps: Starknet aims for a fully composable ecosystem, enabling DeFi protocols to interoperate seamlessly.

Industry Impact

StarkWare technology underpins several major Web3 projects. For instance, dYdX initially used StarkEx, StarkWare’s scaling engine, before moving to its own appchain. Immutable X, a leading NFT platform, built its solution on StarkWare technology, allowing gas-free NFT minting and trading—a critical innovation during NFT market booms.

With over $260 million in funding and an ecosystem brimming with developer activity, StarkWare remains one of the most crucial players shaping Layer 2’s zk future.

Offchain Labs (Arbitrum)

Dominating the Layer 2 DeFi Landscape

Offchain Labs, founded in 2018 and creators of Arbitrum, has emerged as the market leader in Optimistic Rollups. Arbitrum offers a cost-effective solution for scaling Ethereum dApps, maintaining security guarantees while processing transactions off-chain and resolving disputes on-chain if necessary.

Key Strengths

• EVM Compatibility: Allows seamless migration of Ethereum smart contracts.
• Low Fees: Typically 90-95% cheaper than mainnet Ethereum transactions.
• DeFi Ecosystem: Hosts protocols like Uniswap, SushiSwap, and GMX.

Technological Innovations

Arbitrum Nitro, released in 2022, greatly increased throughput and reduced costs further, enabling faster transactions and smoother user experiences. Arbitrum Orbit, meanwhile, offers customizable Layer 3 chains built atop Arbitrum’s Layer 2.

Ecosystem Leadership

Arbitrum has consistently ranked as the top Layer 2 in Total Value Locked (TVL), exceeding $18 billion in some peaks of 2025. Its developer tooling and strong community engagement make it the preferred platform for projects requiring reliable scalability.

Polygon Labs (Polygon zkEVM)

From Sidechains to Full zkEVM Prowess

Polygon Labs began its journey as a sidechain solution but has aggressively repositioned itself as a powerhouse in Layer 2 development. With the launch of Polygon zkEVM, the firm entered the zero-knowledge arena with an Ethereum-compatible rollup architecture.

Polygon zkEVM’s Promise

• Seamless Migration: Supports existing Solidity smart contracts with minimal changes.
• Cost Efficiency: Dramatically reduces gas fees compared to Ethereum L1.
• Ecosystem Adoption: Early integrations include Aave, Lens Protocol, and several NFT projects.

Polygon’s acquisition of Hermez Network and their consolidation under zkEVM illustrates how the firm combines R&D agility with business savvy. They’ve announced over $1 billion in grants and incentives to attract Layer 2 projects.

Consensys (Linea)

Enterprise-Grade zkEVM Solutions

While best known for MetaMask and Ethereum infrastructure tools, Consensys has become an unexpected but formidable Layer 2 player with Linea, its zkEVM rollup. Launched in 2023, Linea targets enterprises and developers looking for a scalable yet familiar EVM environment.

Unique Value Proposition

• Enterprise Focus: Emphasis on compliance and high-availability infrastructure.
• Developer Tools: Integrates seamlessly with Consensys tools like Infura and Truffle.
• Rapid Adoption: Early pilots include digital identity solutions and DeFi integrations.

With Consensys’s credibility and vast developer reach, Linea has quickly become a serious Layer 2 option, especially for businesses demanding enterprise-grade reliability.

Scroll

Building the zkEVM From Scratch

Founded in 2021, Scroll is one of the purest Layer 2 zkEVM projects, meticulously crafting zk circuits to replicate EVM functionality. Their focus on creating a native zkEVM—rather than relying on transpilation—sets them apart.

Technical Milestones

• zkEVM Fidelity: Scroll’s goal is bytecode-level compatibility, allowing all Ethereum smart contracts to migrate without code changes.
• Security & Performance: Aims for minimal latency while maintaining zk proofs’ rigorous security.

Scroll secured over $80 million from investors like Polychain Capital and Sequoia China. As of 2025, they’re onboarding DeFi projects looking for maximum trustlessness and minimal fees.

Aztec Network

Privacy Meets Scalability

Aztec Network stands out as the premier Layer 2 protocol focused on privacy. While other zk projects emphasize scaling, Aztec prioritizes confidential transactions, allowing users to interact on Ethereum while shielding transaction details.

Key Innovations

• zkSNARKs for Privacy: Used to encrypt transactions without revealing sender, receiver, or amounts.
• Programmable Privacy: Developers can build dApps that selectively disclose information, crucial for applications like payroll or confidential DeFi.

Aztec’s privacy model makes it attractive to institutions and users valuing anonymity, particularly in light of regulatory scrutiny over public blockchains. However, navigating compliance remains an ongoing challenge.

Loopring

Efficient zkRollups for Trading

Founded in 2017, Loopring was one of the earliest Layer 2 pioneers, focusing on zkRollups for decentralized exchanges. Its technology enables order book-based trading with Ethereum security but vastly lower fees.

Achievements

• Loopring Exchange: One of the first zkRollup-powered DEXs offering gas-free trading.
• NFT Marketplace: Allows users to mint and trade NFTs at minimal cost.
• Wallet Innovations: Loopring Smart Wallet supports Layer 2 by default, simplifying onboarding.

While newer zk projects have emerged, Loopring remains relevant due to its working products and loyal user base, proving the commercial viability of zkRollups before the broader market embraced them.

Biconomy

Simplifying Layer 2 UX

Finally, Biconomy takes a unique approach to Layer 2 by focusing on user experience rather than core infrastructure. Its tools abstract away gas fees, onboarding complexities, and multi-chain interactions.

Core Offerings

• Gasless Transactions: Allows apps to pay gas fees on behalf of users.
• Cross-chain SDKs: Simplifies bridging assets and data across Layer 2s.
• Plug-and-Play Integrations: Developers can integrate Layer 2 support in minutes.

In a landscape of complex cryptography and protocols, Biconomy ensures end-users enjoy seamless Web3 interactions—a vital piece of Layer 2 adoption.

The Road Ahead

The Layer 2 ecosystem is no longer an experimental frontier—it’s the backbone of blockchain’s next era. In 2025, transaction volumes on Layer 2 solutions are expected to outpace Layer 1 activity for many use cases. Projects like EIP-4844 (proto-danksharding) promise even greater synergy between Layer 1 and Layer 2, slashing costs and further increasing scalability.

The ten companies featured here are leading that charge. Whether building cryptographic proofs that can handle billions of transactions or creating smooth user experiences for mass adoption, these firms are defining how blockchain scales for the future.

For developers, enterprises, and crypto enthusiasts alike, keeping a close eye on these innovators isn’t just advisable—it’s essential. The Layer 2 race is far from over, but these companies are ahead of the curve, laying the rails for blockchain’s next billion users.