Layer 2 refers to scaling systems built on top of a Layer 1 blockchain to improve transaction speed, cost, or throughput.
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Short definition
Layer 2 is layer 2 refers to scaling systems built on top of a Layer 1 blockchain to improve transaction speed, cost, or throughput.
Simple explanation
Layer 2 networks aim to make transactions cheaper or faster while using a base chain for settlement or security assumptions.
Why it matters
Layer 2 systems affect fees, bridges, finality, and user network selection.
Example context
Arbitrum, Optimism, and Base are examples of Ethereum Layer 2 networks.