Layer 2 (L2)
Networks that process transactions cheaply off the main chain while inheriting its security — Ethereum's chosen path to scale.
A Layer 2 executes transactions off a base chain, then posts compressed proofs or data back to it — inheriting the L1’s security while multiplying throughput and cutting fees to cents. Ethereum’s rollup ecosystem (Arbitrum, Optimism, Base, zk-rollups) carries a large share of its activity; Bitcoin’s Lightning Network applies the concept to payments.
The nuance worth knowing: L2s differ in maturity — many still run training-wheel components (sequencers, upgrade keys) controlled by teams. “Inherits L1 security” is a spectrum claim, tracked publicly by frameworks like L2Beat’s stages. Still, cheap blockspace changed what’s buildable: on-chain activity that was economically absurd at $30 per transaction is routine at $0.03.