Layer two architecture refers to a secondary framework or protocol built atop an existing blockchain, known as layer one, to enhance its scalability and transaction throughput. These solutions process transactions off the main chain, bundling them into a single transaction that is then settled on the primary blockchain. Examples include state channels, sidechains, and rollups, each employing different methods to achieve higher transaction volumes and lower fees. This approach alleviates congestion on the foundational network.
Context
Layer two architecture is a dominant topic in cryptocurrency news, particularly concerning the scalability challenges faced by popular blockchains like Ethereum. Ongoing developments focus on improving the security, decentralization, and interoperability of these solutions. The successful implementation and adoption of robust layer two systems are considered crucial for the widespread commercial use of decentralized applications and digital assets.
Anonymous Multi-Hop Locks (AMHLs) are a new primitive that secures payment channels against fee theft, ensuring both privacy and scalable off-chain transfers.
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