Glossary · L
Layer 2 (L2)
A secondary network built on top of a Layer 1 blockchain that processes transactions off the main chain and posts compressed proofs back to L1. L2 networks offer dramatically lower fees and higher speed. Major Ethereum L2s include Arbitrum, Optimism, Base, and zkSync.
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How Layer 2 works in practice
A Layer 2 executes transactions off the base chain and posts the results back to it, inheriting the L1's settlement guarantees at a fraction of the cost. Rollups are the dominant design, differing mainly in how they prove correctness.
Worked example
An L2 batches thousands of transactions and posts one compressed record to Ethereum. Users pay a small fraction of L1 fees while retaining the ability to prove their state against L1 data.
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The mistake that costs people money
Most L2s still run a centralised sequencer that orders transactions, and withdrawal to L1 can involve a challenge period of up to a week on optimistic designs. 'Secured by Ethereum' does not mean 'behaves like Ethereum'.
Layer 2: common questions
- What is Layer 2?
- A secondary network built on top of a Layer 1 blockchain that processes transactions off the main chain and posts compressed proofs back to L1. L2 networks offer dramatically lower fees and higher speed. Major Ethereum L2s include Arbitrum, Optimism, Base, and zkSync.
- How does Layer 2 work in practice?
- A Layer 2 executes transactions off the base chain and posts the results back to it, inheriting the L1's settlement guarantees at a fraction of the cost. Rollups are the dominant design, differing mainly in how they prove correctness.
- Can you give an example of Layer 2?
- An L2 batches thousands of transactions and posts one compressed record to Ethereum. Users pay a small fraction of L1 fees while retaining the ability to prove their state against L1 data.
- What do people get wrong about Layer 2?
- Most L2s still run a centralised sequencer that orders transactions, and withdrawal to L1 can involve a challenge period of up to a week on optimistic designs. 'Secured by Ethereum' does not mean 'behaves like Ethereum'.