How Do Layer 2 Solutions Aim to Reduce Smart Contract Gas Costs?
Layer 2 solutions, such as rollups (Optimistic and ZK), process smart contract transactions off the main blockchain (Layer 1) and then bundle or compress them into a single, smaller transaction that is posted back to Layer 1. This amortization of the Layer 1 gas cost across many Layer 2 transactions drastically reduces the effective gas fee for each individual smart contract interaction.
Glossar
Layer 2 Solutions
Architecture ⎊ Layer 2 Solutions are off-chain protocols built atop a base settlement layer, designed to inherit its security while dramatically increasing transaction throughput and reducing latency, making them essential for high-frequency crypto derivatives trading.
Smart Contract Gas
Cost ⎊ Smart Contract Gas represents the fundamental computational cost required to execute any operation on the Ethereum Virtual Machine (EVM), serving as the internal pricing mechanism for transaction processing.
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.