Term
Layer 2 (L2)
A Layer 2 is a blockchain built on top of a base chain (Layer 1) to increase throughput and reduce fees by executing transactions off the main chain and posting compressed proofs back to it — Arbitrum, Optimism, Base and Lightning are canonical L2s.
A Layer 2 (L2) is any protocol that inherits security from a base blockchain (the Layer 1) while doing most of its transaction execution off-chain. On Ethereum, the dominant L2 category is rollups — Arbitrum, Optimism, Base, zkSync, Starknet — which batch thousands of transactions off-chain and post compressed proofs to L1. Users get fees 10-100x cheaper than mainnet Ethereum while inheriting Ethereum's security for their final settlement.
The two rollup flavors are optimistic (Arbitrum, Optimism, Base) — which assume batches are valid and use a challenge period to catch fraud — and zero-knowledge (zkSync, Starknet, Scroll) — which post cryptographic validity proofs with each batch. Optimistic rollups are simpler to build and dominate volume today; ZK rollups are technically stronger and are catching up.
On Bitcoin, the primary L2 is the Lightning Network, using off-chain payment channels for near-instant, near-zero-fee payments. It works differently from Ethereum rollups (channel-based, not batch-based) but shares the "inherit L1 security, get L2 speed" property.
Bridging assets to an L2 usually happens through an official bridge from L1. Once on L2, the same asset (ETH, USDT, USDC) works with L2-native DeFi at much lower cost. SwapZilla supports several L2s (Arbitrum, Optimism, Base) as source and destination networks for swaps.
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