What Are Layer 2 Solutions — And Why Do They Matter in Crypto?
What Is a Layer 2 Solution?
A Layer 2 solution is a system built on top of a Layer 1 blockchain. Instead of processing every transaction directly on the main chain, Layer 2s handle transactions off-chain (or semi off-chain) and then settle the results back to Layer 1.
This approach allows blockchains to:
Process more transactions
Reduce fees
Improve user experience
Preserve Layer 1 security guarantees
Common Types of Layer 2 Solutions
Some widely used Layer 2 designs include:
Rollups – Bundle many transactions together and submit a single proof to Layer 1
Optimistic Rollups – Assume transactions are valid unless challenged
Zero-Knowledge Rollups (ZK-Rollups) – Use cryptographic proofs to verify correctness
State Channels – Enable off-chain interactions with on-chain settlement
Each design comes with trade-offs between speed, complexity, and security assumptions.
