What is an L2 (Layer 2)?
L2s are scaling solutions that batch many transactions and settle them cheaply on Ethereum. Arbitrum, Optimism, and Base are the major players.
Ethereum is secure and decentralized, but it can only process about 15 transactions per second. As demand grew, gas fees regularly spiked to $50+ per transaction. L2s exist to fix that.
An L2 (Layer 2) is a separate blockchain that does its own transaction processing, then periodically posts a compressed proof of what happened back to Ethereum (the "L1"). You get speed and cheap fees, while inheriting Ethereum's security.
The major L2s today:
- Arbitrum — Largest by TVL, EVM-equivalent, used heavily for DeFi. - Optimism — Built on the OP Stack, which now powers many other L2s. - Base — Coinbase's L2, also built on the OP Stack. Strong consumer focus. - zkSync, Starknet, Scroll, Linea — Zero-knowledge rollups using different cryptographic proofs.
Practical implications:
- Bridging — To use an L2, you "bridge" your ETH or USDC from mainnet to the L2. Built-in bridges take 7 days for security (optimistic rollups) or minutes (zk rollups). Third-party bridges are faster but introduce more trust assumptions.
- Fees — Typically 10–100× cheaper than mainnet. A DEX swap might cost $0.10 instead of $5.
- Same wallet — Your MetaMask or wallet of choice already supports them; you just switch networks.
Most DeFi action has migrated to L2s. If you're paying $20 in gas on mainnet for a trade, you're doing it wrong.