According to The Block, layer 2 scaling solutions enable blockchains such as Ethereum to handle greater transaction activity without requiring every operation to occur directly on the base chain. The Ethereum network provides security and decentralization but has limited blockspace; when demand increases, fees rise and users may be priced out. Layer 2 systems address this by relocating transaction processing to auxiliary platforms that sit alongside Ethereum while still relying on it for final settlement, security guarantees, data posting, or verification.
