L2 solutions refer to Layer 2 solutions, which are a type of scaling solution for blockchains. They work by processing transactions off-chain, meaning not directly on the main blockchain. This helps reduce congestion on the main blockchain and speeds up transaction times.
One popular L2 solution is the Lightning Network for Bitcoin, which allows users to create payment channels that don’t need to be recorded on the main blockchain until they are closed. This enables faster and cheaper transactions for Bitcoin users.
Another example is the Polygon network for Ethereum, which offers a way to create sidechains that can process transactions quickly and cheaply before settling the final state on the main Ethereum blockchain.
Overall, L2 solutions are a way to improve scalability and reduce costs on blockchains by moving some of the transaction processing off the main chain.
