What Are "Layer 2 Solutions" and How Do They Address High DeFi Fees? ▴ Learn

What Are “Layer 2 Solutions” and How Do They Address High DeFi Fees?

Layer 2 solutions are secondary frameworks or protocols built on top of a Layer 1 blockchain, like Ethereum. They process transactions off-chain, bundle them together, and then submit a single, compressed proof or state update back to the L1.

By amortizing the cost of the L1 transaction over hundreds or thousands of L2 transactions, they drastically reduce the per-user transaction fee, making DeFi activities more accessible and profitable.

Can the Overhead Be Amortized across Multiple Financial Transactions?

What Is the Impact of Transaction Batching on Network Throughput and User Fees?

How Do Layer 2 Solutions Reduce Mainnet Transaction Fees?

How Does the Overhead of Proof Generation Impact Transaction Fees?