Layer 2
Layer 2 solutions are blockchains or protocols built on top of a main blockchain (like Ethereum) to increase speed and lower fees while inheriting the security of the base layer.
Understanding the Concept
Ethereum's great for security and decentralization, terrible for speed and cost. Layer 2s solve this. Arbitrum, Optimism, and Polygon process transactions off the main chain, then batch-settle them on Ethereum. You get Ethereum's security with transactions costing pennies instead of $50. This is critical for crypto's mass adoption. Nobody's paying $20 gas fees to buy a coffee. Layer 2s make DeFi accessible to normal people, not just whales. The trade-off is complexity and fragmentation. Liquidity's split across chains. Bridging between layers has risks. But as L2s mature, they're becoming the default way to use Ethereum.
Real-World Example
You use Arbitrum to trade on a DEX. Your transaction costs $0.10 and settles in 2 seconds. Same trade on Ethereum mainnet would cost $40 and take 12 seconds. No brainer.
How Strykr Helps
Strykr tracks Layer 2 developments across the crypto ecosystem. Our AI provides real-time insights and alerts to help you navigate the market with confidence.
Try Strykr Free