What Is a "Layer-2 Scaling Solution" and Why Is It Important for Token Utility? ⎊ Path

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

A layer-2 scaling solution is a framework built on top of a layer-1 blockchain (like Ethereum) to increase its transaction throughput and reduce gas fees. Technologies like rollups (Optimistic and ZK) bundle many off-chain transactions into a single layer-1 transaction.

This makes tokens more usable for frequent, low-value activities, such as daily trading or in-game purchases, enhancing their overall utility.

What Is the Concept of “Bridging” Assets between Layer-1 and Layer-2?

How Do Layer 2 Scaling Solutions Address the Limitations of Smart Contracts?

Can a Decentralized Options Protocol Operate Entirely on a Layer-2 Network?

How Do Layer 2 Solutions like the Lightning Network Address Block Space Limitations?

How Do Layer 2 Solutions Aim to Reduce Smart Contract Gas Costs?

How Do ‘Layer 2’ Solutions Address PoW Scalability Issues?

What Is the Difference between an Optimistic Rollup and a ZK-Rollup?

What Scaling Solutions Aim to Reduce the Impact of Network Congestion on Fees?