A Layer 2 is a network built on top of a base Layer 1 blockchain to help it handle more activity. Instead of processing every transaction directly on the base chain, a Layer 2 handles them separately and then settles the results back to the Layer 1, easing congestion.
The main goal is scale. By moving much of the work off the base layer, Layer 2 solutions can offer faster and cheaper transactions while still relying on the underlying network for security. Many popular scaling solutions for Ethereum work this way.
There are trade-offs to understand. Different Layer 2 designs make different choices about how much they depend on the base chain and how quickly funds can move back. Knowing that Layer 2 exists to address Layer 1 limits helps explain a large part of how crypto is evolving.
Frequently Asked Questions
Why are Layer 2 networks used?
They help a base blockchain handle more transactions by processing much of the work separately, then settling results back to the Layer 1, allowing faster and cheaper activity.
Do Layer 2 networks rely on the base chain?
Yes. They still depend on the underlying Layer 1 for security and final settlement, though different designs vary in how much they rely on it and how fast funds move back.
