DeFi & Crypto Technical
Layer 2 (L2)
A scaling solution operating on top of a Layer 1 blockchain — settles transactions at lower cost.
Definition
Layer 2 protocols (Optimism, Arbitrum, Polygon, zkSync) operate on top of a Layer 1 blockchain to provide higher transaction throughput and lower costs while inheriting L1 security. Distinct from sidechains (separate consensus). MiCA generally treats L2-issued tokens the same as L1-issued tokens.