Layer 2

Layer 2 refers to technologies and protocols built on top of a Layer 1 blockchain to enhance scalability, speed, and reduce fees. They process transactions off-chain and settle only the final data on the blockchain, reducing network congestion. Examples of Layer 2 solutions include Rollups, State Channels, and Plasma, which improve transaction efficiency on Ethereum, Bitcoin, and other networks. Layer 2 is essential for mainstream blockchain adoption, enabling high throughput without compromising decentralization and security.