asset_classes

Layer 2

A Layer 2 is a scaling solution built on top of a blockchain’s base layer (Layer 1) that processes transactions off the main chain or in aggregated form before final settlement on Layer 1, with the goal of higher throughput and lower fees.

Example: A DeFi app routes user transactions to a Layer 2 network to batch multiple trades before settling the results on the Ethereum Layer 1 chain.

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