A Layer-2 network is a secondary framework or protocol built on top of an existing blockchain, known as the Layer-1 network. Its primary purpose is to enhance the scalability and speed of transactions. Layer-2 solutions process transactions off the main chain, reducing congestion and fees on the base layer.
Context
Layer-2 networks are a pivotal area of development in the cryptocurrency space, directly addressing the scalability limitations of many established blockchains. Ongoing research and implementation focus on various approaches, including state channels, sidechains, and rollups, each with distinct trade-offs in security and performance. Discussions frequently center on their adoption rates, security assurances, and their capacity to support a broader range of decentralized applications.
J.P. Morgan introduces a permissioned deposit token on a public Layer 2 blockchain, streamlining institutional payments with 24/7 near-instant settlement.
A sophisticated flash loan and validator key compromise on Shibarium Bridge enabled a multi-million dollar asset drain, highlighting critical cross-chain security vulnerabilities.
JP Morgan leverages Base for JPMD deposit tokens, enabling institutional clients to achieve near-instantaneous payment settlement and enhanced capital efficiency.
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