What is Layer 2 (L2)?

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Layer 2 (L2) solutions are a class of off-chain scaling technologies built on top of a base Layer 1 (L1) blockchain, such as Ethereum, designed to significantly increase transaction throughput and reduce gas fees while inheriting the underlying L1's security and decentralization guarantees. These protocols process transactions externally and then post the resulting state change back to the L1, effectively offloading the execution burden to enhance the overall network capacity.

Layer 2 (L2)

What is Layer 2 (L2)?

Why are Layer 2 (L2) solutions necessary for the scalability and adoption of Layer 1 (L1) blockchains like Ethereum?

What are the key technical differences between Optimistic Rollups and ZK-Rollups, and how do they affect transaction finality?

How do Layer 2 solutions drastically reduce transaction costs and what impact has this had on the Total Value Locked (TVL) and dApp development?

What is the long-term future and evolutionary trajectory of Layer 2 technology, including the emergence of Layer 3 protocols and the modular blockchain thesis?

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