Layer 2
A separate network built on top of a base chain to process transactions faster and far more cheaply.
A Layer 2 processes transactions off the main chain, then posts a compressed record back to it for security. Ethereum is the clear case: secure but slow and pricey, so scaling moved on top of it.
Rollups dominate. Arbitrum, Optimism, and Base bundle thousands of transactions into one batch and settle it on Ethereum, often cutting fees by 90% or more. The base chain still guarantees the funds.
Risk to know: most Layer 2s still run a centralized sequencer, and many keep an upgrade key in a small team's hands.
Related terms
The base blockchain itself, where transactions settle and security lives, before any add-on networks built on top.
RollupA scaling method that batches many transactions off-chain and posts a compressed proof or record to the base layer.
Optimistic RollupA rollup that assumes transaction batches are valid and lets anyone challenge fraud within a set dispute window.
zk-RollupA rollup that posts a cryptographic validity proof for every batch, giving near-instant finality on the base chain.