Layer-2

Layer-2 refers to a set of protocols built on top of a blockchain (Layer-1) that aim to improve scalability and transaction speeds while reducing costs. These solutions address the limitations of the underlying blockchain by processing transactions off the main chain and then periodically settling them back to Layer-1. Common Layer-2 solutions include state channels, sidechains, and rollups, which enhance user experience and facilitate wider adoption of cryptocurrency by enabling faster and cheaper transactions.