What is a layer 2?
A layer 2 processes blockchain activity above a base network, then relies on that base network for part of its security and settlement.
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GlossaryA layer 2 is a network built above another blockchain to make transactions cheaper or faster.
Imagine a busy shop that writes many purchases on its own running list, then regularly sends a checked total to the main accountant. The shop can work quickly, while the main accountant keeps the final record. This is only an analogy. Real layer 2 networks use software and cryptographic proofs or dispute systems, not paper totals.
On Ethereum, a layer 2 usually processes transactions away from Ethereum’s main chain and later posts data or proofs back to Ethereum. Users often move assets between the two networks through a bridge.
Different layer 2 networks make different trade-offs. A layer 2 can still have its own sequencer, bridge, upgrade keys, fees and shutdown risks. Using Ethereum for settlement does not make every part of the layer 2 identical to Ethereum or guarantee that its operator will continue running it.
Common misunderstanding
A layer 2 is not simply another name for Ethereum. It is a separate execution environment that depends on Ethereum in specific ways. Users may still need to bridge assets back if the layer 2 closes or an application leaves.
No prerequisite reading is needed. Definition source: Ethereum’s layer 2 guide.