Warum Layer 2?

Ethereum can only process a limited number of transactions per second. When demand surges, blocks fill up and gas fees spike.

Layer 2 (L2) solutions exist to scale throughput without sacrificing the security of the base chain.

Layer 1 (L1) is the base blockchain like Ethereum. Layer 2 is a separate system that processes transactions off the main chain but settles back to it.

• L1: maximum security, limited throughput
• L2: high throughput, inherits L1 security

The trilemma says a chain struggles to be simultaneously scalable, secure, and decentralized at L1.

L2s sidestep this by handling scale off-chain while leaning on L1 for security and decentralization.

Every operation costs gas, paid in ETH. Limited block space means users bid against each other, pushing fees up during congestion.

By moving execution off L1, L2s drastically cut the cost per transaction.

The key insight of L2s: they do the heavy computation off-chain but post data or proofs to L1.

This lets them inherit Ethereum's security rather than bootstrapping a brand-new validator set.

L2s batch many transactions together and submit a single compressed summary to L1.

Hundreds of L2 transactions share the cost of one L1 submission, slashing per-user fees.

The leading L2 design is the rollup. Rollups execute transactions off-chain and post the resulting data to L1, where it can be verified.

We will explore Optimistic and ZK rollups in detail next lesson.

Besides rollups, there are:

• State channels — off-chain payment channels
• Sidechains — independent chains with their own security
• Validiums — ZK proofs with off-chain data

Each trades off security, cost, and complexity differently.

A sidechain runs in parallel with its own consensus and validators. It does not inherit L1 security.

If a sidechain's validators are compromised, funds can be lost — a key difference from rollups.

For users, L2s mean near-instant confirmations and cheap fees, while still being able to bridge back to Ethereum.

This makes everyday actions like swaps, mints, and games economically viable on-chain.

Layer 2s scale Ethereum by executing transactions off-chain and batching results to L1, inheriting its security while cutting fees dramatically.

Rollups lead the way, with sidechains and channels as alternatives. Next: how rollups actually work.

Test your Layer 2 fundamentals.

You learned that:

• L2s scale L1 by executing off-chain and settling on-chain
• They sidestep the trilemma and cut gas fees
• Batching shares L1 costs across many transactions
• Rollups inherit L1 security; sidechains do not

Next: rollups in depth.