Glossary · assets and networks
What is a layer 2?
A layer 2 is a network built on top of another blockchain that handles transactions more cheaply, then commits the result back to the underlying chain. You get the base network’s security at a fraction of its cost.
Why they exist, and what they change for payments
A popular blockchain gets expensive when it is busy, because everyone is competing for the same limited space in each block. That is fine for large transfers and ruinous for small ones.
A layer 2 moves the activity elsewhere, batches it, and posts a compact proof back to the base chain. Users get lower fees and faster confirmation, and the base chain still underwrites the result.
For payments the effect is straightforward. A layer 2 makes small crypto payments economically sensible, which is what turns crypto from a way to move large sums into a way to take a 20 EUR order.
The trade is a little added complexity. A layer 2 is a distinct network with its own addresses, so it inherits every rule on this site about matching the network to the asset.
What it means for you
Three effects worth knowing before you enable one.
Small payments start to work
When the fee is cents rather than dollars, low-value orders stop being uneconomic.
Frequently asked questions
Is a layer 2 less safe?
It is a different security model rather than a strictly weaker one, and the details differ per network. For payment-sized amounts the established ones are widely used in production.
Do I have to support layer 2s?
No. It is a coverage decision. If your orders are small, it is the difference between viable and not.
Can I move funds between a layer 2 and its base chain?
Yes, by bridging, which is a separate operation from a payment. Do not treat it as part of one.