Baskin Logic Crypto Academy

Intermediate · Scaling

What is a layer 2 (L2)? Rollups explained

By Joshua Baskin, founder · Reviewed · Sources

How a layer 2 worksYou transact on the layer 2. It batches many transactions. It posts data or proofs to layer 1. Layer 1 provides the final security.1You transact on the layer 22It batches many transactions3It posts data or proofs to layer 14Layer 1 provides the finalsecurity
How a layer 2 works

The short lesson

A layer 1 is a base blockchain (Bitcoin, Ethereum). A layer 2 handles transactions on top and relies on the layer 1 for security in some way.

  • Optimistic rollups: assume batches are valid and allow a challenge window; withdrawals to L1 can take days.
  • ZK rollups: post a validity proof with each batch.
  • Lightning: two parties open a channel and pay each other many times, settling on Bitcoin later.

Risks to know

  • Many L2s still have upgrade keys or a single sequencer. Sites like L2BEAT track these “stages”.
  • Bridges have been hacked. Use the official bridge and small test amounts.
  • The same address format can exist on several networks; choose the right one when withdrawing from an exchange.

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Common questions

Is a layer 2 a different coin?

Often it uses the same coin (ETH) for fees but is a different network.

Why do withdrawals take days?

Optimistic rollups wait out a challenge period.

Sources

  1. ethereum.org: Layer 2
  2. L2BEAT risk analysis
  3. Lightning Network paper

Sources checked October 23, 2026. Rules change; check the official source before acting.

Education only. Not investment, tax or legal advice. We do not pick coins.