Layer 2

Additional protocols established on existing frameworks to boost processing, efficiency, or effectiveness.

Layer 2 is the general name of the additional operations algorithms that are instituted over existing blockchain networks. The goal of this complementary framework is to augment and boost an area in the underlying framework that is lacking in some way. The most common areas include processing speeds, volume management, and scalability.

Layer 2 frameworks also function as off-chain options, meaning that they operate as semi-independent blockchain systems themselves. However, due to interoperability, they are very compatible with the native blockchain network and greatly increase most aspects of its processing. Arbitrum, Polygon and Optimism are examples of layer-2 blockchains on the Ethereum network.


Previous term

Law of Demand

Read More

Next term

Ledger

Read More