Layer 2 (L2) refers to off-chain solutions built atop primary blockchains (Layer 1) to enhance scalability and speed without compromising decentralization and security.
L2 solutions tackle the challenge of achieving scalability, decentralization, and security simultaneously, which is often a trade-off in Layer 1 networks like Bitcoin and Ethereum.
L2 processes transactions off-chain, consolidates them, and periodically updates the main chain, ensuring efficiency while preserving blockchain integrity.
Ethereum's co-founder envisions L2 scaling as the key to maintaining Ethereum's security while offering low fees and high-speed transactions for dApps.
Rollups batch transactions for cost and speed improvements, while state channels enable direct off-chain transactions, recording only the final state on-chain.
Projects like Farcaster (decentralized social networks) and Polymarket (prediction markets) leverage L2 for faster, cost-effective blockchain solutions.
Layer 2 is poised to drive blockchain's evolution, enabling high-performance DeFi, gaming, and Web3 applications while making blockchain more accessible.