A Layer 2 blockchain is a secondary framework or protocol built on top of an existing blockchain, known as Layer 1, to improve its scalability and transaction speed. These solutions process transactions off the main chain, thereby reducing congestion and lowering fees on the primary blockchain. Examples include payment channels, state channels, and sidechains, all designed to enhance the throughput and efficiency of the underlying network. They are instrumental in enabling broader adoption of blockchain technology.
Context
The current discourse surrounding Layer 2 blockchains predominantly centers on their effectiveness in alleviating congestion and reducing transaction costs on major networks like Ethereum. Key debates involve the security trade-offs associated with different Layer 2 architectures and the user experience of interacting with these off-chain solutions. Critical future developments to monitor include the widespread adoption of optimistic rollups and zero-knowledge rollups, as well as their interoperability and integration with existing decentralized applications.
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