Layer-2 Solutions

Definition ∞ Layer-2 solutions are secondary frameworks or protocols built on top of an existing blockchain, such as Ethereum, to improve its scalability and efficiency. These solutions process transactions off the main blockchain (Layer-1) and then bundle them into a single transaction that is recorded on the main chain, thereby increasing transaction speeds and reducing costs. They are designed to augment the capabilities of the base layer.
Context ∞ Layer-2 solutions are a primary subject of discussion when addressing blockchain scalability challenges and the ongoing quest for higher transaction throughput at lower costs. Developments in rollups, state channels, and sidechains are closely followed for their impact on decentralized application performance and user accessibility.