What is Layer 2?
A network built on top of a base blockchain (usually Ethereum) that processes transactions faster and cheaper, settling back to the main chain for security.
A Layer 2 is a network built on top of a base blockchain — overwhelmingly Ethereum — that processes transactions fast and cheap, then posts compressed proofs back to the main chain, borrowing its security. Arbitrum, Optimism and Polygon's ecosystem are the familiar names; the screener's Layer 2 filter shows the class we track.
L2s exist because base-layer gas made small transactions uneconomic; they cut costs dramatically while inheriting (most of) Ethereum's security rather than bootstrapping their own. The practical user note: an L2 is a different network — coins must be bridged or withdrawn to it specifically, and sending tokens to the right address on the wrong network remains a classic loss. Always match the network on both ends.
See it in practice
Related terms: Ethereum · Gas fees · Bridge · full glossary
FAQ
Why not just make the base blockchain faster?
Because speed trades against decentralisation and security at the base layer. The layered design keeps the settlement layer conservative and pushes volume upward — the same architecture as court systems and card networks.
Are my coins on a Layer 2 as safe as on Ethereum?
Close, but not identical — L2s inherit Ethereum's security for settled state, while adding their own components (sequencers, bridges, upgrade keys) that carry residual trust. Safer than independent small chains; not literally Ethereum.
General information only, not financial advice. Definitions are maintained in our fact database and reviewed with the daily rebuild.