What Is a Layer 2 Blockchain? L2 Solutions Explained Simply

As blockchain adoption continues to grow, so does the demand for scalable, fast, and cost-efficient transactions. However, popular Layer 1 blockchains like Ethereum often struggle with congestion and high gas fees. This is where Layer 2 (L2) blockchains come in.

In this guide, we'll explain what a Layer 2 blockchain is, how it works, and why it's essential for the future of crypto.

What Is a Layer 2 Blockchain?

A Layer 2 blockchain is a secondary framework built on top of an existing Layer 1 blockchain (such as Ethereum) to improve scalability and performance. Instead of changing the base layer itself, Layer 2 solutions offload some of the transaction processing to another network, which later settles back onto the main chain.

In simple terms:

Layer 1 (L1) = The main blockchain (e.g., Ethereum, Bitcoin).

Layer 2 (L2) = A separate network that works with the main chain to handle more transactions faster and cheaper.

Why Do We Need Layer 2?

Layer 1 blockchains prioritize decentralization and security, but often at the cost of speed and scalability. As demand increases (especially during NFT drops or DeFi booms), the network slows down and gas fees surge.

Layer 2s solve these problems by:

Increasing throughput (more transactions per second)

Reducing transaction costs

Maintaining decentralization and security (by settling on L1)

This balance is known as the blockchain scalability trilemma, and Layer 2 solutions are a major step toward solving it.

How Do Layer 2 Blockchains Work?

Different Layer 2 solutions use different methods, but they all aim to make blockchain activity faster and cheaper without compromising security.

Here are the most common L2 approaches:

1. Rollups

Rollups bundle (or "roll up") hundreds of transactions off-chain, then post a summary to Ethereum. This drastically reduces gas fees per user.

There are two main types:

Optimistic Rollups: Assume transactions are valid unless challenged (e.g., Arbitrum, Optimism).

ZK Rollups: Use cryptographic proofs to verify batches of transactions (e.g., zkSync, StarkNet).

2. State Channels

Users lock funds into a smart contract and transact off-chain with each other. Once done, the final state is recorded on-chain. Example: Raiden Network.

3. Plasma

Creates child chains that run alongside the main blockchain. Plasma chains periodically submit proofs to the base layer for validation. Example: early version of Polygon.

4. Sidechains

Independent blockchains that run parallel to L1s and connect via bridges. Sidechains like Polygon PoS offer faster, cheaper transactions but rely on their own validators—so not strictly "Layer 2" by some definitions.

Popular Layer 2 Solutions

Here are some of the most widely used L2s in 2025:

Benefits of Using Layer 2s

Whether you're a trader, DeFi user, or NFT collector, Layer 2s offer major advantages:

✅ Lower Fees

Transactions cost a fraction of what you'd pay on Ethereum Layer 1.

✅ Faster Transactions

Enjoy near-instant confirmation, ideal for trading and gaming.

✅ Better User Experience

Lower gas fees and smoother UX help onboard new users.

✅ Ethereum Compatibility

Most L2s inherit Ethereum's security or are EVM-compatible, so developers can deploy dApps with minimal changes.

Risks and Challenges

While Layer 2s offer powerful benefits, there are also some caveats:

⚠️ Bridge Security

To move assets between L1 and L2, you use a bridge—a common target for hacks. Always use official bridges.

⚠️ Fragmented Liquidity

Each L2 has its own liquidity pools and tokens. Moving between them can be costly or confusing.

⚠️ Newer Technology

L2s are still evolving. Bugs, smart contract risks, and limited adoption in some apps are concerns.

How to Use a Layer 2 Blockchain

Getting started with Layer 2s is easier than ever:

Create a Wallet (e.g., MetaMask)

Bridge Assets from Ethereum to a Layer 2 (e.g., Arbitrum Bridge)

Use DApps on Layer 2: Swap tokens, lend assets, mint NFTs, etc.

Withdraw Funds back to Ethereum L1 if needed

Or, skip bridging and buy L2 tokens directly on BitMart to start exploring the ecosystem.

Final Thoughts

Layer 2 blockchains are vital to the future of Web3, helping solve Ethereum’s scalability issues while keeping decentralization intact. Whether you're looking to save on gas fees or experiment with new dApps, Layer 2s are worth exploring.

As demand for faster and cheaper blockchain experiences grows, so will the importance of L2s in powering the next generation of crypto applications.

Start exploring Layer 2 tokens like ARB, OP, and MATIC on BitMart today.