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Layer 2

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Layer 2 (L2) refers to scaling solutions built on top of a blockchain (Layer 1) to increase transaction speed and reduce costs.

Simple Explanation

Imagine a busy highway (Ethereum) with traffic jams. Layer 2 is like building express lanes above the highway where most traffic moves faster and cheaper, while still being connected to and secured by the main highway.

How It Works

  1. Transactions happen on Layer 2 (off the main chain)
  2. Transactions are bundled together
  3. Bundles are posted to Layer 1 for security
  4. You get speed and low cost of L2 + security of L1

Popular Layer 2 Solutions

  • Optimistic Rollups: Arbitrum, Optimism
  • ZK Rollups: zkSync, StarkNet
  • Sidechains: Polygon
  • State Channels: Lightning Network (Bitcoin)

Benefits

  • Lower Fees: Transactions cost cents instead of dollars
  • Faster: Transactions confirm in seconds
  • Scalable: Can handle many more transactions
  • Secure: Inherit security from Layer 1

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