Definition ∞ The layer-2 scaling effect describes the benefit derived from offloading transaction processing from a main blockchain to secondary protocols built atop it. This approach significantly increases transaction throughput and reduces fees on the base layer. Layer-2 solutions enable decentralized applications to handle a greater volume of user activity more efficiently.
Context ∞ Cryptocurrency news frequently reports on the layer-2 scaling effect, particularly in the context of Ethereum’s efforts to enhance transaction capacity. The successful implementation of layer-2 solutions, such as rollups, leads to a noticeable reduction in congestion and transaction costs on the primary chain. This effect is crucial for supporting widespread adoption of decentralized applications and digital assets. Ongoing developments aim to further amplify these scaling benefits.
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