Ethereum has been from the start one of crypto’s biggest success. It is essential a blue-chip crypto along with of course Bitcoin.

L1 Ethereum blockchain network is a proof of work (PoW) protocol which for the most part can cause substantial gas fees when it comes to transactions. In Ethereum they are handled individually so this ultimately means that the gas fees are higher, Now when you compare that to another blockchain say for example Solana, the transactions are vetted by a small group of people, however fees are incredibly lower and faster. In L2 Polygon transactions are handled in bulk, this reduced the gas fees and UD covers gas fees. This is a critical component especially those who have tried DeFi recently or trading NFTs. The gas fees can become astronomical and frustrating.

How Does L2 fix this?

Layer 2 is a collective term for solutions designed to help scale your application by handling transactions off the main Ethereum chain (layer 1). When the network is busy it slows down the transactions which hamper the user experience for certain types of dapps, especially in DeFi and those related to gaming. And as the Ethereum network gets busier, gas prices increase as transaction senders aim to outbid each other. This can make using Ethereum very expensive.

So to summarize, we need Layer 2 because:

  • Some use-cases, like blockchain games, make no sense with current transaction times
  • It can be unnecessarily expensive to use blockchain applications
  • Any updates to scalability should not be at the expense of decentralization of security – layer 2 builds on top of Ethereum.

Without going into the weeds, some of the most common Layer 2 solutions that have been worked on for years are:


With all the brilliant minds working on these solutions, all you need to know is that you can expect many of your favorite DeFi apps to begin building on Layer 2 solutions, enabling near instant transaction settlement times for fractions of a penny in gas costs.

Synthetix is building with optimistic rollups on Optimism and has already begun testing with Synthetix users.

Loopring, a popular DEX built with zkRollups, has been live for over a year with over $35M in total value locked trading for fractions of a penny in gas costs.


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