Layer-1 refers to a base blockchain protocol, such as Bitcoin or Ethereum, which processes and secures transactions directly on its main network. Layer-2 solutions are secondary frameworks built atop these Layer-1 blockchains, designed to improve scalability and transaction speed. These Layer-2 networks, like rollups or sidechains, process transactions off-chain and then periodically settle them back to the main Layer-1. This architectural approach aims to alleviate congestion on the foundational chain.
Context
The relationship between Layer-1 and Layer-2 technologies is a constant focus in blockchain news, particularly concerning network scalability and transaction costs. Reports often compare the performance and security trade-offs of different Layer-2 solutions. The discussion includes the ongoing competition among various Layer-2 protocols and their role in the future of decentralized applications. Innovations in this area are critical for supporting widespread adoption of blockchain technology.
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