Application Layer Scaling

Definition ∞ Application layer scaling refers to methods for increasing the transaction processing capacity of decentralized applications. These solutions operate above the base blockchain protocol, often off-chain, to handle a greater volume of operations. They aim to reduce congestion and transaction fees on the main network by processing computations or transactions elsewhere. This approach permits wider adoption and improved user experiences for decentralized applications.
Context ∞ Discussions around application layer scaling frequently center on the efficiency and security tradeoffs of various layer-2 solutions like rollups and sidechains. The ongoing situation involves a continuous drive to achieve higher throughput without compromising the core security properties of the underlying blockchain. Future developments will likely focus on interoperability between different scaling solutions and their integration into existing decentralized finance ecosystems.