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

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.

How Does a Layer-2 Scaling Solution Address the High Transaction Fee Risk?

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

How Do Layer 2 Scaling Solutions Address the Throughput Issue?

How Do Layer 2 Solutions Reduce Mainnet Transaction Fees?