Layer 2 Scaling Solutions

Protocols built on top of a base blockchain that process transactions off-chain for faster and cheaper execution.

Crypto & DeFi

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)

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