Layer 2 (L2)

A Layer 2, or L2, is a separate network built on top of a base blockchain such as Ethereum to make transactions faster and cheaper while still relying on the base chain for security. Instead of processing every transaction on the main chain, an L2 handles them off-chain in bulk and periodically posts compressed data or proofs back to Layer 1, which remains the final record. Rollups, sidechains and state channels are the common designs. For users, an L2 usually feels like the same network with much lower gas fees, but funds must be bridged in and out, and each L2 carries its own smart contract and operator risks.