The primary investment appeal of Layer 2 solutions lies in their cost efficiency, offering transactions at a fraction of Ethereum’s Layer 1 gas fees. Projects like Polygon and zkSync have gained traction by enabling affordable DeFi and NFT interactions, attracting developers and users alike. However, Layer 1 blockchains like Binance Smart Chain or Cardano compete by offering low fees natively without requiring additional layers. While Layer 2 solutions benefit from Ethereum’s robust security and network effects, their success hinges on Ethereum maintaining its market lead—should Layer 1 alternatives capture significant developer mindshare, Layer 2 investments could face pressure.