What is Layer-2?
A secondary network built on top of a main blockchain to make transactions faster and cheaper.
What is Layer-2?
Layer-2 (often written as L2) refers to a secondary blockchain built on top of an existing main blockchain (called Layer-1). The purpose of a Layer-2 is to handle transactions more quickly and cheaply than the main chain, before settling the final results back to the main chain for security.
Why Do We Need Layer-2?
Ethereum, the world's most popular smart contract blockchain, can only process about 15 transactions per second. During busy periods, transaction fees (called gas fees) can spike to Rs 3,000-10,000 per transaction - making it impractical for everyday use. Layer-2 solutions handle thousands of transactions off the main chain at a fraction of the cost.
Popular Layer-2 Networks
- Polygon: One of the most popular L2s, widely used in India. Fees are often less than Rs 1 per transaction. Founded partially by Indian developers.
- Arbitrum: A major L2 for DeFi activity, with low fees and Ethereum-level security.
- Optimism: Another popular Ethereum L2 backed by major investors.
- zkSync and StarkNet: Next-generation L2s using advanced cryptography (zero-knowledge proofs) for even greater efficiency.
India and Layer-2
Polygon was co-founded by Indian developers Sandeep Nailwal, Jaynti Kanani, and Anurag Arjun - making it a source of national pride in the crypto community. Many Indian DeFi users and NFT projects use Polygon as their primary chain because of its near-zero fees and fast transaction times.
Key Point
When you use a Layer-2, your funds inherit the security of the main chain (Ethereum) but you pay much less and transact much faster. It is the best of both worlds for most everyday crypto users.
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