Layer 2 Transactions and Decentralized Main Networks

Learn about ‘rollups,’ the term for processing transactions in layer 2 and periodically recording the proofs on decentralized main networks. Explore examples, benefits, and case studies.

What is Layer 2 Processing?

Layer 2 processing refers to the off-chain solutions that enable faster and cheaper transactions by conducting them outside of the main blockchain network.

The Term for Processing Transactions in Layer 2

The term for processing transactions in layer 2 and periodically recording the proofs on the decentralized main network is known as ‘rollups’.

Understanding Rollups

Rollups allow for batching and compressing transactions off-chain before submitting them as a single proof to the main network, reducing congestion and fees.

Examples of Rollups

  • Ethereum Rollups: Projects like Optimism and Arbitrum are implementing rollups to improve scalability and efficiency on the Ethereum network.
  • Solana Serum: Solana’s Serum decentralized exchange utilizes rollups for faster and cheaper transactions.

Case Studies

Several DeFi platforms are adopting rollups to enhance their transaction processing capabilities and provide a better user experience.

Benefits of Rollups

  • Scalability
  • Cost-efficiency
  • Reduced congestion
  • Enhanced transaction speed

By leveraging layer 2 solutions like rollups, blockchain networks can achieve higher throughput and improved performance.

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