Layer-2 Networks

Definition ∞ ‘Layer-2 Networks’ are off-chain scaling solutions built on top of existing blockchain protocols, primarily to enhance transaction speed and reduce costs. These networks process transactions away from the main blockchain, bundling them into batches before submitting a summary or proof back to the main chain. This architecture significantly increases throughput without compromising the security guarantees of the base layer. Their development is crucial for enabling widespread adoption of blockchain applications.
Context ∞ The development and adoption of ‘Layer-2 Networks’ continue to be a central theme in blockchain scalability discussions. Solutions like Optimistic Rollups and Zero-Knowledge Rollups are gaining traction, aiming to address the transaction congestion and high fees often associated with Layer-1 blockchains. The interoperability between different Layer-2 solutions and their integration with existing decentralized applications are key areas of ongoing research and development.