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Layer 2 (L2)

A Layer 2 (L2) is a scaling solution built on top of an existing blockchain (Layer 1), such as Ethereum, to improve transaction speed, reduce fees, and increase scalability without compromising the security of the base layer.

What is a Layer 2 (L2)?


A Layer 2 (L2) is a scaling solution that works on top of a Layer 1 (L1) blockchain, such as Ethereum, to address issues of scalability, high transaction fees, and limited throughput. The idea behind L2 solutions is to offload a significant portion of the computational and transactional workload from the main Ethereum blockchain, thus enhancing its performance without compromising its decentralization or security.


L2 solutions use various techniques to aggregate and process transactions oon thwir own chain before committing the final data back to the main Ethereum blockchain. This approach allows many transactions to be batched together, reducing congestion on the Ethereum network and lowering fees for users. Common types of L2 solutions include Rollups (such as Optimistic Rollups and ZK-Rollups), State Channels, and Sidechains. These solutions enable Ethereum to support a higher volume of transactions without increasing the size of the blockchain itself, thereby maintaining a high level of decentralization.


In contrast, Solana has chosen a different approach to scaling by building a monolithic blockchain. This means that all of the transactions, smart contracts, and data storage happen on a single layer, allowing for faster transaction speeds and lower fees. However, this model comes at the cost of increased centralization, as Solana requires powerful hardware for its nodes, which makes it difficult for many participants to run a full node.


The future of Ethereum scaling lies in its L2 approach, and as the ecosystem matures, new Ethereum Improvement Proposals (EIPs) aim to make L2s more efficient and user-friendly. Innovations such as cross-liquidity between L2s and the obfuscation of technical complexities related to bridging and managing different addresses across chains will allow users to interact seamlessly without worrying about which specific L2 they are using. This means that from a UI/UX perspective, the experience of using Ethereum and its L2s could eventually become as simple as interacting with a monolithic chain like Solana, providing the benefits of both scalability and decentralization.


As these EIPs are implemented, users will be able to access the liquidity of different L2s without manually bridging assets, and technologies like multi-chain addresses will allow them to interact across multiple L2s seamlessly. This could position Ethereum’s L2 scaling solution as the best of both worlds: providing scalability similar to Solana while maintaining a high level of decentralization and security.


Keywords:
layer-2 ethereum-l2 blockchain-scaling rollups zk-rollups optimistic-rollups solana-vs-ethereum l2-scaling-solutions cross-liquidity ethereum-scaling decentralized-applications

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