Layer 2

Layer 2 is a separate system built on top of a blockchain (the underlying ledger that records crypto 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 or blockchain companies, because it's a key way networks handle more users without getting congested. For example, if Ethereum (a major blockchain) gets slow and expensive, people might move their transactions to a Layer 2 solution like Arbitrum to save money and time. It's basically a scaling solution—making the system work better for more people.