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.