What Is a Layer 2?

Modified on: Mon, 23 May, 2022 at 4:55 AM

Blockchains like Bitcoin and Ethereum are often described as “Layer 1” chains or L1 because they settle every transaction on their network, meaning, every time you send a transaction (such as when you exchange a cryptocurrency, mint a domain, or connect a wallet), each individual transaction has to go through miners, be processed on the chain and after the transaction is mined, get recorded onto the blockchain. 

The benefit of this process is that it is the most secure way to interact with the blockchain, as each transaction is validated via consensus by the entire network. The challenge, however, is that each of these transactions requires computational power and energy to process, which becomes quite difficult (and expensive) to do as the number of transactions increases. The result is slower transactions with high fees due to the higher demand.

Layer 2, often referred to as "scaling solutions" or L2, is a collective term for solutions designed to help scale transactions off the main Ethereum or Bitcoin chain, Layer 1. So, rather than sending every transaction through Layer 1, it works to handle these transactions on a separate blockchain known as a "Layer 2" to help with congestion issues. Polygon, the Layer 2 that we will be using, employs a PoS (Proof-of-Stake) consensus mechanism that is a much more economical solution than the typical PoW (Proof-of-Work) alternative while remaining robust and secure.

Bear in mind that this information is explained as easily as possible and the complexity of the operability of Layer 1 and Layer 2 and the interoperability of both of them are excluded from this short explanation, however, the Unstoppable Team hopes you find this information to be useful.

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