Ethereum’s Layer 2 ecosystem is set to thrive in 2025 as scalability solutions become integral to Web3 adoption. Arbitrum and Optimism, both leveraging Optimistic Rollups, dominate due to their ability to process transactions off-chain while maintaining Ethereum’s security. Arbitrum’s competitive advantage lies in its Arbitrum Virtual Machine (AVM) and Nitro technology, which support parallel transaction processing and lower costs. Features like Arbitrum Stylus, enabling coding in Rust and C++, broaden developer appeal and enhance scalability for complex dApps. Optimism’s strength is its EVM-equivalent Optimistic Virtual Machine (OVM), which simplifies dApp porting with minimal code changes, making it ideal for Ethereum developers. Its Bedrock architecture optimizes performance, achieving 2–4 second transaction finality. However, Optimism’s single-round fraud proofs may incur higher gas fees compared to Arbitrum’s multi-round system, which prioritizes cost efficiency.