Mode L2

Definition ∞ Mode L2 refers to a Layer 2 scaling solution designed to improve the transaction capacity and speed of a base blockchain network. These solutions operate on top of an existing Layer 1 blockchain, processing transactions off-chain before settling them on the main chain. This architecture significantly reduces congestion and transaction fees on the primary network, enhancing overall network efficiency. Examples include rollups, sidechains, and state channels, each with distinct mechanisms for achieving scalability.
Context ∞ Mode L2 solutions are a central discussion point in the ongoing efforts to scale blockchain networks, particularly for decentralized applications and broader adoption. News frequently covers advancements in Layer 2 technology, their impact on transaction costs, and their role in facilitating a more performant digital asset ecosystem. Future developments will likely involve increased interoperability between various Layer 2 networks and further optimization of their security and decentralization properties.