Layer 2

A layer 2 is a network built on top of a base blockchain (layer 1) that processes transactions more cheaply and quickly while relying on the base chain for security or final settlement. The goal is to scale without making the base layer harder for ordinary users to verify.

On Ethereum, the main layer-2 design is the rollup. Rollups execute transactions off the main chain, then post compressed transaction data and a proof or claim of the result back to Ethereum. Optimistic rollups such as Arbitrum and Optimism assume results are valid unless challenged within a dispute window. Zero-knowledge (ZK) rollups submit a cryptographic validity proof. On Bitcoin, the Lightning Network is the best-known layer 2.

Layer 2s carry their own risks, including upgradeable contracts, centralised sequencers and bridge vulnerabilities, which vary from project to project.