Layer 2

Layer 2 is a separate system built on top of a blockchain (the underlying ledger that records cryptocurrency transactions) to speed things up and reduce costs. Think of it like an express lane on a highway—instead of every transaction getting recorded on the main blockchain, Layer 2 bundles many transactions together and settles them in batches, which is faster and cheaper. You'll hear about Layer 2 when researching crypto projects, since it's a key way networks like Ethereum handle more activity without getting congested. For example, if you're comparing two blockchain projects, one might advertise that it uses a Layer 2 solution to process payments 100 times faster than its competitor. It's become important because it helps cryptocurrencies actually work for everyday use.