Layer Two Networks are scaling solutions built on top of existing blockchain protocols, such as Ethereum, to increase transaction throughput and reduce fees. These networks process transactions off the main blockchain, or Layer One, before periodically settling them back on the main chain. Examples include rollups and state channels, designed to enhance the efficiency of decentralized applications. They significantly improve the scalability of underlying blockchains.
Context
Layer Two Networks are central to addressing the scalability limitations of popular blockchains, enabling broader adoption of decentralized applications. Their continued development and refinement are crucial for supporting high-volume use cases like gaming and social media. The competition among various Layer Two solutions focuses on security, decentralization, and ease of developer integration.
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