Layer 2
Definition
Secondary framework built on top of an existing blockchain.
Layer 2 refers to a secondary framework built on top of an existing blockchain, designed to enhance its functionality, scalability, and privacy. These layers operate independently, communicating with the main blockchain through a two-way peg mechanism.
Layer 2 matters as it enables blockchain networks to process more transactions per second, reduce fees, and improve privacy. For instance, Ethereum's Layer 2 solutions like Plasma and Optimistic Rollups aim to address its scalability issues, making it more efficient for decentralized applications (dApps) and smart contracts.