Clear DefinitionsLayer 2
Pronunciation
[ley-er too]
Analogy
If Layer 1 is the main, busy highway into a city that can get congested, Layer 2 solutions are like express toll roads, side streets, or high-speed rail lines built alongside or above the main highway. They allow traffic (transactions) to move much faster and cheaper for certain types of journeys, but they ultimately connect back to the main highway system (Layer 1) for final security and settlement.
Definition
A secondary framework or protocol built on top of an existing Layer 1 blockchain. Layer 2 solutions aim to improve scalability, transaction speed, and reduce costs by handling transactions off the main Layer 1 chain, while still deriving their security from it.
Key Points Intro
Key Points
Built on top of a Layer 1 blockchain to enhance its capabilities.
Aims to increase transaction throughput (scalability) and reduce fees.
Transactions are processed off the L1 chain but periodically anchored or settled on the L1 for security.
Common types include Rollups (Optimistic and ZK), State Channels, Sidechains, and Plasma.
Example
The Lightning Network is a Layer 2 solution for Bitcoin that allows for fast and cheap micropayments. Polygon (PoS) is a popular Layer 2 scaling solution for Ethereum, offering various technologies like sidechains and rollups.
Technical Deep Dive
Layer 2 solutions work by offloading the bulk of transactional computation from the Layer 1 chain. They execute transactions independently but submit proofs or summaries of these transactions back to the Layer 1. The security model of a Layer 2 is crucial: 'true' L2s like rollups inherit security directly from the L1 by ensuring that even if the L2 operators are malicious, users can eventually withdraw their funds or correct the state via the L1. Other solutions like sidechains might have their own separate consensus mechanisms and security assumptions.
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