Layer 2
A scaling solution built on top of a Layer 1 blockchain that processes transactions off-chain and posts proofs or data back to L1.
Layer 2 networks execute transactions outside the main blockchain (off-chain) to achieve higher throughput and lower fees, while inheriting the security of the underlying Layer 1. The two dominant L2 architectures for Ethereum are Optimistic Rollups and ZK-Rollups.
Major Ethereum L2s include Arbitrum and Optimism (Optimistic Rollups), zkSync Era and Starknet (ZK-Rollups), and Base (an Optimistic Rollup by Coinbase). Each has its own ecosystem of DeFi protocols, tokens, and applications.
L2s reduce gas costs by 10–100× by batching many transactions together and submitting compressed proofs or data to Ethereum. Users bridge assets between L1 and L2 — a process that takes minutes on ZK rollups but up to 7 days on Optimistic rollups (due to the challenge period).