L2

Definition ∞ An L2 refers to a secondary framework or protocol built on top of an existing blockchain. These systems aim to improve transaction speed and reduce costs by processing transactions off the main chain. They derive security from the base layer blockchain, typically Ethereum.
Context ∞ The development and adoption of L2 solutions are central to addressing the scalability limitations of major blockchains. Debates often focus on the trade-offs between different L2 architectures, such as optimistic rollups and zero-knowledge rollups, concerning security, decentralization, and user experience. Increased L2 activity is a strong indicator of network growth and user engagement.