Glossary
Layer 2
A network that processes transactions off-chain and settles proofs on-chain.
A layer 2 executes activity away from the base chain and periodically posts compressed results back to it, inheriting the base chain's security for settlement while charging a fraction of the fee. Rollups are the dominant design. The trade-offs live in how quickly funds can be withdrawn and who can censor.
Related terms
Blockchain, Ethereum, Smart Contract, Proof of Stake, Consensus Mechanism