Layer 2

A layer 2 is a network built on top of a base blockchain (a layer 1) that processes transactions off the main chain while relying on it for security and final settlement. The goal is scale: base chains like Ethereum can handle only a limited number of transactions per second, so layer 2s execute activity elsewhere, then post compressed results back to the layer 1, letting one expensive base-layer transaction stand in for thousands of cheap ones.

The dominant layer-2 design on Ethereum is the rollup, in two flavors: optimistic rollups (Arbitrum, Optimism, Base) assume batches are valid and allow fraud challenges during a dispute window, while ZK-rollups (zkSync, Starknet, Linea) attach cryptographic validity proofs to every batch. Bitcoin's best-known layer 2 is the Lightning Network, which routes payments through pre-funded channels and settles on-chain only when channels open or close. For example, a token swap that might cost several dollars on Ethereum mainnet typically costs cents on Base, yet the funds involved ultimately settle back to Ethereum.

A common misconception is that layer 2s are independent blockchains with their own security; a true layer 2 inherits the layer 1's security guarantees — if the rollup's operators vanish, users can still exit using data posted on the base chain — which distinguishes them from sidechains, whose separate validator sets you must trust. In practice, many layer 2s still run centralized sequencers and upgrade keys, so their trust-minimization is a work in progress rather than a finished fact.