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How Does ‘Layer 2 Scaling’ Fundamentally Differ from ‘Layer 1 Scaling’?

Layer 1 scaling involves increasing the base blockchain's capacity (e.g. larger blocks, sharding). Layer 2 scaling involves building protocols on top of the base chain to handle transactions off-chain, then periodically settling the state back to Layer 1.

Layer 2 prioritizes scalability while inheriting Layer 1's security.

How Does Sharding Compare to Layer 2 Solutions in Addressing Blockchain Scalability?
How Does the ‘Gas Limit per Block’ Affect Network Capacity?
What Are the Primary Scalability Limitations of Proof of Work?
What Is the Concept of “Block Gas Limit” and How Does It Affect Network Capacity?