A Layer Two Network is a secondary protocol built atop an existing blockchain, known as Layer One, to enhance its scalability and efficiency. These networks process transactions off the main chain, bundling them before submitting a summarized record to the Layer One blockchain. This approach reduces transaction fees and increases transaction throughput. Examples include rollups and sidechains, which address the limitations of foundational blockchains.
Context
Layer Two networks are a central topic in discussions about blockchain scalability and the future of decentralized applications. Their development is critical for enabling widespread adoption of high-volume activities, such as gaming or micro-payments, on congested Layer One chains. News frequently highlights advancements in Layer Two technology, new protocol launches, and the migration of applications to these more efficient environments.
The issuance of JPMD on a public Layer 2 network fundamentally re-architects institutional cash management, enabling atomic, 24/7 settlement and mitigating systemic counterparty risk across global treasury operations.
Tokenizing commercial bank deposits on a public Layer 2 network provides institutional clients with instant, 24/7 settlement finality, drastically improving capital efficiency.
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