Definition
Layer 2 is a collective term for scaling solutions that operate on top of a base blockchain, often called Layer 1, to improve performance. These solutions process transactions off the main chain while ultimately relying on the underlying blockchain for security, data availability, or settlement. By shifting most activity away from the congested base layer, Layer 2 systems aim to offer higher throughput and lower fees without creating an entirely separate ecosystem.
A Layer 2 network typically has its own transaction rules and infrastructure but periodically interacts with the base chain to finalize or verify its state. Designs such as a rollup are examples of this concept, where many transactions are bundled together and anchored to the main chain. Some networks, like Polygon in certain configurations, are also described as Layer 2 when they extend the capabilities of a major base blockchain while maintaining close economic and technical ties to it.
Context and Usage
The term Layer 2 is used to distinguish scaling-focused networks from the foundational Layer 1 blockchains they depend on. It emphasizes that these systems are not fully independent chains but extensions that leverage the security or finality of an existing base layer. In discussions about network design, Layer 2 is often contrasted with approaches that scale directly at Layer 1, such as changing block size or consensus parameters.
Within the broader ecosystem, Layer 2 solutions are central to debates about how to handle high transaction demand without sacrificing decentralization. References to specific implementations, including a rollup or platforms like Polygon, typically highlight how each Layer 2 balances security guarantees, cost, and compatibility with existing applications. The concept remains flexible, but the core idea is always that Layer 2 builds on, rather than replaces, an underlying blockchain.