The Layer 2 ecosystem’s investment potential in 2025 hinges on delivering low-cost, high-performance solutions for Ethereum’s congestion. Arbitrum and Optimism excel by offloading transactions while maintaining security. Arbitrum’s competitive advantage is its faster block times and multi-round fraud proofs, reducing gas fees and enabling near-instant transactions, perfect for DeFi and gaming. Its Arbitrum Nova chain further cuts costs via off-chain data storage. Optimism’s single-round fraud proofs and OP Stack prioritize modularity, supporting scalable chains like Base, but its 2–4 second finality and higher dispute fees trail Arbitrum’s efficiency.