Layer 2
A separate blockchain system that processes transactions quickly and cheaply while periodically settling back to Layer 1 for security.
Last Updated
2026-03-19
Related Concepts
What is Layer 2?
Layer 2 (L2) is a secondary blockchain that sits on top of Layer 1, processing transactions faster and cheaper by bundling them and periodically settling the final state back to Layer 1.
How does Layer 2 work?
- Transactions are processed by Layer 2 validators instead of Layer 1.
- Multiple transactions are batched into a single bundle.
- The bundle is submitted to Layer 1 where the final state is recorded.
Optimistic Rollups assume transactions are valid by default and only verify if challenged. ZK Rollups use cryptographic proofs to verify all transactions instantly.
Why does Layer 2 matter?
Layer 2 solves the scalability problem of Layer 1 blockchains, which can only process a limited number of transactions per second due to their focus on decentralization and security.
Key features of Layer 2
- Significantly lower transaction fees than Layer 1
- Much faster confirmation times
- Maintains Layer 1 security through periodic settlement
- Users can bridge funds between Layer 1 and Layer 2
Examples of Layer 2
Arbitrum and Optimism are Layer 2 solutions on Ethereum, reducing transaction costs from dollars to pennies. Bridge your ETH from Ethereum mainnet to Arbitrum, interact with DApps cheaply, then bridge back when done.