A Layer Two solution is a secondary framework built atop an existing blockchain to enhance its performance. These protocols function as extensions to a primary blockchain, enabling faster and cheaper transactions by processing them off the main chain before finalizing them on the Layer 1 network. They are designed to alleviate congestion and improve the overall efficiency of decentralized applications without compromising the underlying security of the base layer. Common examples include optimistic rollups and zero-knowledge rollups, each employing distinct cryptographic techniques.
Context
Layer Two solutions are fundamental to addressing the scalability limitations of many popular blockchains, particularly in the context of increasing transaction demand. The current environment involves ongoing innovation and competition among various Layer Two technologies, each striving to offer superior speed, cost-effectiveness, and security. A critical future development will be the widespread deployment and standardization of these solutions, enabling decentralized applications to support a global user base.
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