As blockchains get busier, they get slower and more expensive to use. “Layer 1” and “Layer 2” describe two levels of the stack that solve this in different ways.<\/p>\n
A Layer 1 is the underlying blockchain itself: Bitcoin, Ethereum, Solana. It is where transactions ultimately settle and where security and decentralisation live. The catch is that verifying every transaction on thousands of computers is what makes an L1 secure \u2014 and also what makes it congest and charge higher fees when demand spikes.<\/p>\n
A Layer 2 is a separate network that runs on top of<\/em> a Layer 1 to make it faster and cheaper. It processes transactions away from the main chain and then settles a compressed summary back to the L1, inheriting most of its security. Bitcoin’s Lightning Network and Ethereum rollups such as Arbitrum and Optimism are the best-known examples.<\/p>\n The Layer 1 is the secure foundation; the Layer 2 is the scaling layer that keeps everyday transactions cheap. The trade-off with L2s is added complexity \u2014 you often bridge assets across, and different L2s have different security and withdrawal models. As the technology matures, those rough edges are smoothing out.<\/p>\nHow to think about it<\/h2>\n