Layer 1 and layer 2
Base blockchains, networks built on top of them, and why scaling is done in layers.
A layer 1 is a base blockchain with its own consensus and security, such as Bitcoin, Ethereum or Solana. A layer 2 is a network built on top of a layer 1 that processes transactions separately and relies on the layer 1 for security or settlement.
Why layers?
Base blockchains are designed to be secure and decentralised, which limits how many transactions they can handle. When demand grows, fees rise. Layer 2 networks take part of the work off the main chain and make transactions cheaper and faster.
Rollups
The most common layer 2 design on Ethereum is the rollup. It executes many transactions off-chain and posts a compressed summary to Ethereum.
- Optimistic rollups assume transactions are valid and allow a challenge period for fraud proofs (examples: Arbitrum, Optimism).
- Zero-knowledge rollups post a cryptographic proof that the transactions are valid (examples: zkSync, Starknet).
Other approaches
- Payment channels, such as Bitcoin's Lightning Network, let two parties make many payments off-chain and settle the result on-chain.
- Sidechains are separate blockchains connected by a bridge; they have their own security.
What to keep in mind
- Moving funds between layers uses bridges, which add their own risks.
- The same token can exist on several layers and networks. Always check which network you are using before sending funds.
University materials are for education only and are not investment, legal or tax advice.