Definition
A Layer 2 (L2) system extends a base blockchain by handling some activity outside its direct execution path. The relevant security relationship matters: merely connecting a separate chain with a bridge does not automatically make it an L2. Different designs rely on different proofs, data and exit procedures.
How It Works
Rollups execute transactions outside the base chain and submit data or commitments that can be checked under their design. Validity-proof systems and optimistic systems use different verification approaches. Other scaling constructions, such as payment channels, coordinate activity through their own rules. These systems should not be assumed to share the same withdrawal timing or trust model.
Key Considerations
An L2 can reduce per-transaction costs or increase practical capacity, but it may add sequencer, upgrade, bridge or data-availability dependencies. Users should distinguish the L2’s execution status from settlement or finality on its base chain. A lower fee does not by itself imply stronger security. The ability to recover or exit when operators fail is an important part of evaluating the system.