What Is a Layer-2 Scaling Solution and How Does It Affect DEX Transaction Speeds? ▴ Learn

What Is a Layer-2 Scaling Solution and How Does It Affect DEX Transaction Speeds?

A layer-2 scaling solution is a framework or protocol built on top of a main blockchain (Layer 1). Its purpose is to increase transaction throughput and reduce costs without compromising the security of the main chain.

Examples include Rollups and State Channels. By processing transactions off-chain and then bundling them into a single transaction on the main chain, Layer 2s can dramatically increase the speed and lower the cost of using a DEX.

This makes the user experience on non-custodial exchanges much more comparable to that of their custodial counterparts.

What Is a “Layer-2 Scaling Solution” and Why Is It Important for Token Utility?

How Do Transaction Speeds and Costs Compare on Custodial versus Non-Custodial Platforms?

How Do ‘Layer 2’ Scaling Solutions like Optimism or Arbitrum Reduce Gas Costs?

Name a Layer-2 Scaling Solution for a Major PoW Cryptocurrency