Can a Decentralized Options Protocol Operate Entirely on a Layer-2 Network?

Yes, many decentralized options protocols are deploying directly on Layer-2 networks to leverage their lower gas fees and faster transaction speeds. Operating entirely on Layer-2 allows the protocol to handle high-frequency trading and complex contract logic affordably.

While the core security is derived from Layer-1, the entire trading and settlement process occurs on the Layer-2 environment.