Can a Layer 2 Solution Be Compromised Even If the Underlying Layer 1 Is Secure?
Yes, an L2 can be compromised due to vulnerabilities in its own smart contract code, a centralized sequencer being hacked or censoring transactions, or a failure in its proof-verification mechanism. While L1 provides the final security anchor, the L2's specific implementation and operational model introduce distinct risks.
These risks are typically categorized as "smart contract risk" or "liveness risk."
Glossar
Centralized Sequencer
Component ⎊ In certain Layer Two scaling architectures, this centralized entity is responsible for ordering and sequencing transactions before submitting a compressed batch proof back to the main chain.
Smart Contract
Code ⎊ The contract is fundamentally self-executing code deployed on a distributed ledger, embodying the terms of the agreement in an immutable format.
Layer 2
Architecture ⎊ Layer 2 solutions, within the cryptocurrency ecosystem, fundamentally represent off-chain scaling methodologies designed to alleviate congestion and enhance transaction throughput on the primary blockchain, often referred to as Layer 1.
Layer 1
Architecture ⎊ The foundational protocol layer establishes the core rules for transaction ordering, consensus, and finality, which underpins the entire ecosystem for derivatives trading.