What Is Layer 2?

Layer 2 (L2) solutions are secondary blockchain networks built on top of a base layer like Ethereum that process transactions off-chain before settling results in compressed batches on the main chain. They enable higher throughput and lower gas fees by shifting computational load off-chain while inheriting the security of the underlying blockchain. Common types include optimistic rollups (used by Arbitrum and Optimism) and zero-knowledge rollups (used by ZKsync). Layer 2 networks are increasingly important for decentralised finance as they make trading, swaps and strategy execution more cost-effective.

See also

• Ethereum

• EVM-compatible

• Gas fee

• ZKsync

• Decentralised finance

• Onchain