Definition
Layer 2 (L2) solutions address blockchain scalability by processing transactions off the main chain (Layer 1) while inheriting its security. Rollups (optimistic and zero-knowledge) are the dominant L2 approach, bundling hundreds of transactions into a single L1 transaction. L2s reduce fees by 10-100x and increase throughput dramatically. Arbitrum, Optimism, and zkSync are leading Ethereum L2s.
lightbulb Example
A DeFi trade on Ethereum mainnet costs $15 in gas. The same trade on Arbitrum (L2) costs $0.15—100x cheaper. The L2 periodically submits compressed transaction batches to Ethereum for final settlement, inheriting Ethereum's security.
verified_user Key Points
- Processes transactions off the main chain
- Reduces fees by 10-100x
- Rollups: optimistic and zero-knowledge types
- Inherits security from the base layer (L1)