Technology · Five minutes
What is a layer 2?
A second network that does the work and posts the result to the main chain, so you get the main chain’s security at a fraction of the fee.
- The ideaExecute off-chain, settle on-chain
- Fee savingTypically more than 90 percent
- Two typesOptimistic and zero-knowledge
- Check firstCan you exit without the operator
A blockchain is slow because every node verifies everything. Making it faster by demanding more of each node means fewer people can verify, which gives away the point. So the scaling answer is to move the work somewhere else while keeping the guarantee.
A rollup executes transactions on its own network, compresses the results and posts them to the main chain along with enough data for anyone to reconstruct or challenge them. Your funds remain recoverable from the main chain even if the rollup operator disappears. That is the guarantee, and it is the only thing that distinguishes a rollup from a separate chain with a bridge.
The two families
Optimistic rollups assume the posted result is correct and allow anyone to prove otherwise during a challenge window, usually about a week. Cheap and compatible with existing tooling. The withdrawal delay is the cost, and in practice liquidity providers front the funds for a fee so most users never see it.
Zero-knowledge rollups post a cryptographic proof that the computation was done correctly. No waiting period, because the proof is checked immediately. Harder to build and rapidly maturing.
What it costs and saves
Fees on layer 2 networks are typically more than ninety percent below the main chain, and fell further after Ethereum added cheap dedicated data space for rollups in 2024. That is what made small payments practical.
What to check before you use one
Can you exit without the operator? If not, it is not a rollup, whatever it is called.
Who runs the sequencer? Most rollups have a single operator that orders transactions, which can censor or reorder and can stop. Your funds are safe; your transaction is at its discretion.
How do you bridge in and out? Bridges have been the single largest source of theft in crypto. Use the official one.
Bitcoin's version
The Lightning Network is different: it opens a payment channel between two parties, lets them transact freely off chain, and settles to the base chain only when the channel closes. It is a payment rail, not a general execution environment, and it is good at what it was built for.
Terms used here
Read next
Long reads that use this
Tokens & Crypto
Layer 2
The second floor
Ethereum decided not to get faster and to let other networks do the work instead. Fees fell by an order of magnitude, and the ecosystem acquired a fragmentation problem it has yet to solve.
Tokens & Crypto
Ethereum
The computer that cut its power bill by 99 percent
In September 2022 Ethereum swapped its consensus mechanism while running, with billions of dollars on it, and nothing broke. What that bought, and what it cost, is still being worked out.
Tools