Ethereum Layer 2 solutions offer compelling investment opportunities by addressing scalability and cost issues, enhancing transaction throughput, and reducing fees. Projects like Arbitrum, Optimism, and zkSync leverage Ethereum’s security while outperforming Layer 1 in speed and affordability, attracting developers and users. Compared to Layer 1 competitors like Solana or Avalanche, which boast native scalability, Layer 2s benefit from Ethereum’s established ecosystem and trust. However, competition remains fierce as Layer 1s innovate, and Layer 2 adoption hinges on seamless integration and sustained demand for Ethereum’s infrastructure.