L2 networks, or Layer-2 networks, are secondary frameworks built on top of existing blockchain protocols, primarily Ethereum, to enhance their scalability and transaction throughput. These solutions process transactions off the main blockchain (Layer-1) and periodically batch or commit them back to the Layer-1 for final settlement. Examples include rollups, sidechains, and state channels, all designed to reduce fees and increase transaction speed. They address core limitations of foundational blockchains.
Context
The emergence and development of L2 networks are central to the ongoing efforts to scale blockchain technology and support widespread decentralized application adoption. Discussions frequently focus on the trade-offs between different L2 approaches concerning security, decentralization, and efficiency. A critical future development involves the continued maturation and interoperability of these networks, which will be essential for creating a robust and high-performing multi-chain ecosystem capable of handling global transaction volumes.
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