What is Layer 2 (L2)?

A Layer 2 (L2) is a secondary blockchain network built on top of a Layer 1 base chain (most commonly Ethereum) that processes transactions off the main chain while inheriting its security guarantees, dramatically increasing throughput and reducing transaction costs. Layer 2 networks have become essential infrastructure in the blockchain ecosystem.

Layer 1 blockchains like Ethereum prioritize security and decentralization but face inherent scalability constraints. During periods of high demand, Ethereum transaction fees can spike to tens or hundreds of dollars, making everyday use impractical. Layer 2 solutions address this by batching or compressing transactions off-chain and periodically posting proofs or summaries back to Layer 1.

The two dominant L2 architectures are optimistic rollups and zero-knowledge (ZK) rollups. Optimistic rollups (used by Arbitrum, Optimism, and Base) assume transactions are valid by default and rely on a challenge period during which anyone can submit a fraud proof if they detect an invalid transaction. ZK rollups (used by zkSync, StarkNet, Scroll, and Linea) use cryptographic validity proofs to mathematically verify transaction correctness before posting to Layer 1 — offering faster finality but requiring more complex technology.

Major Layer 2 networks as of 2026 include Arbitrum (the largest by TVL), Base (built by Coinbase, rapidly growing), Optimism (which powers the OP Stack used by multiple L2s), zkSync Era, StarkNet, Scroll, Linea, and Blast. The OP Stack has enabled a ‘superchain’ vision where multiple L2s share infrastructure and interoperability.

Ethereum’s Dencun upgrade in March 2024 introduced ‘blob transactions’ (EIP-4844), which dramatically reduced L2 posting costs by creating a dedicated, cheaper data space for rollup data. This made L2 transactions cost fractions of a cent in many cases.

Users interact with Layer 2 networks by bridging assets from Ethereum (or other L1s), then transacting on the L2 with lower fees and faster confirmation times. Most popular DeFi protocols, NFT marketplaces, and dApps have deployed on multiple L2s. The long-term Ethereum roadmap envisions a ‘rollup-centric’ future where most user activity happens on Layer 2s while Ethereum Layer 1 serves as the settlement and data availability layer.

Last updated: April 2026