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What is a Layer 2 Solution?

A secondary framework or protocol built on top of an existing blockchain to solve transaction speed and scaling difficulties.

Key details

Scalability
Increases transaction throughput of the main chain.
Lower Fees
Often results in reduced transaction costs.
Security
Relies on the security of the underlying blockchain.
Variety
Includes solutions like state channels, sidechains, and rollups.

Examples

  1. 01Bitcoin's Lightning Network for fast, low-cost BTC transactions.
  2. 02Ethereum's Optimism and Arbitrum, which use optimistic rollups.
  3. 03Polygon, a sidechain and commit chain scaling solution for Ethereum.