Layer 2: Making Blockchains Fast
The scalability problem
Ethereum processes about 15-30 transactions per second. That is enough for a few thousand users, but not for millions. When too many people try to transact at once, fees spike and transactions slow down.
Layer 2 (L2) networks solve this by moving most of the work off the main chain (Layer 1) while still using Ethereum for security.
How rollups work
A rollup is the most common type of Layer 2. It processes transactions on its own chain, bundles them together, and posts a compressed summary back to Ethereum.
Batching spreads settlement and data-publication costs across several transactions. Users still need to understand the rollup's sequencer, bridge, data availability, and upgrade controls.
There are two types:
Optimistic rollups
Used by: Arbitrum, Optimism, Base
Assume all transactions are valid by default. If someone suspects fraud, they can submit a fraud proof during a 7-day challenge window. If the fraud proof is valid, the transaction is reversed and the cheater loses their bond.
The trade-off: withdrawing money from an optimistic rollup to Ethereum takes 7 days (the challenge period). Third-party bridges can speed this up for a fee.
ZK (Zero-Knowledge) rollups
Used by: zkSync, StarkNet, Polygon zkEVM
Generate a validity proof that the state transition satisfies the rules encoded by the proof system. Proof generation, submission, and settlement still take time, and the bridge and upgrade design still have security assumptions.
The trade-off: generating ZK proofs requires significant computing power, making the technology more complex to build. But withdrawals can be much faster since the proof guarantees correctness.
Cost comparison
| Operation | Ethereum L1 | Arbitrum | Base |
|---|---|---|---|
| ETH transfer | $0.50-5 | $0.01-0.10 | $0.001-0.01 |
| Token swap | $5-50 | $0.10-0.50 | $0.01-0.10 |
| NFT mint | $10-100 | $0.20-1.00 | $0.02-0.20 |
Fees change with demand, transaction type, and data-publication costs. Obtain a current quote from the wallet or application; the example ranges above are not live prices.
Key takeaways
- Layer 2 networks process transactions off Ethereum's main chain, then settle back to it.
- Optimistic rollups (Arbitrum, Optimism, Base) assume validity, with a 7-day challenge window.
- ZK rollups (zkSync, StarkNet) prove validity with math - no challenge period needed.
- Rollup costs and security assumptions depend on the particular implementation and its settlement design.
- To use an L2, you bridge your assets from Ethereum using a smart contract.
Quiz: Layer 2: Making Blockchains Fast
1 / 5Why does Ethereum need Layer 2 networks?