What is a layer 2 blockchain network?

Layer based blockchains play an important role in the emergence of blockchain networks. Layer 2, these blockchains are designed to address the scalability to speed limitations found in layer 1 blockchain networks. Which happened mainly as a direct response to layer 1 limitations Although there are challenges to such Layer 2 blockchains, the growing adoption of Layer 1 blockchains, exemplified by solutions such as Ethereum and Bitcoin, has triggered the innovation of L2. As we can easily say polygon blockchain is an example of layer 2 based blockchain. We are all familiar with Polygon Blockchain. We are all familiar with its native token $Matic in particular. It is a blockchain that complements the Ethereum and Lightning networks associated with Bitcoin.

source

Such Layer 2 based blockchains are designed to process low-cost transactions in bulk. All such L2-based networks integrate the final result irreversibly into the main blockchain or mainnet. Even the immutable final results are aggregated using parallel blockchains to record the results. Such Layer 2 based blockchains are designed in such a way that they can accommodate more demand than the daily processing capacity of the blockchain. But an important point here is that it was introduced to optimize the scaling of Ethereum in the first place.

Nowadays these layer 2 based blockchains offer quite a lot of benefits due to which they are very popular nowadays. Among these advantages are that such layer 2 blockchains extend their functionality as well as they offer increased transaction fees. Even such layer 2 blockchains permanently record transactions on the mainnet, reducing gas costs as well as ensuring security. By shifting the transaction load to parallel networks, L2 solutions reduce congestion on the mainnet. In the simplest terms, it solves all the problems that Layer 1 based blockchains had. In other words, Layer 2 based blockchains solve all the complex scalability problems that a user faces and all the problems that exist in Layer-1 blockchains like Bitcoin and Ethereum. It not only improves efficiency and processing power. They are becoming popular for the many benefits they provide. They even maintain the security standards required to support a growing variety of decentralized applications (DApps).

Blockchain networks based on Layer 2 have gained a lot of popularity these days and behind this popularity is one of the advantages of this blockchain technology. Such blockchain ecosystems represent an important evolution in the development of blockchain technology. which directly responds to the scalability, speed and cost challenges faced by Layer 1 networks. Such layer 2 based blockchains play a complementary role to layer 1 based blockchains. These Layer 2 based blockchains not only solve the security issues of Layer 1 blockchains. Rather, they inherit decentralization as well as offer innovative solutions. And as a result, these blockchain technologies enable faster and more cost-effective transaction processing.

The continued adoption and development of Layer 2 solutions has the potential to transform the blockchain ecosystem. Layer 2 based blockchains make them more accessible, efficient and scalable than Layer 1. This, in turn, opens up new possibilities for decentralized applications and innovative businesses, from gaming and DeFi to the metaverse and beyond. These Layer 2 based blockchains can accelerate the widespread adoption of blockchain technology across industries.