L2

“L2” in the context of cryptocurrency and blockchain generally refers to “Layer 2” solutions.

Layer 2 solutions are protocols that increase the throughput of transactions on a blockchain without affecting the security of the underlying Layer 1 (L1). L1 is the main blockchain (like Ethereum or Bitcoin), while L2 is a secondary framework or protocol laid on top of an existing blockchain.

Layer 2 solutions are designed to help scale blockchains by handling transactions off the main chain. They use the main chain for security but perform many functions, like transactions, off-chain. This decreases congestion and increases transaction speed, making the blockchain more scalable.

Examples of Layer 2 solutions include Lightning Network for Bitcoin, and Optimism, zkSync, and Arbitrum for Ethereum.