Blockchain 101: What are Layer 2s?
Arbitrum, Optimism, zkSync, and more — discover how Layer 2s scale Ethereum without breaking it, slashing gas fees and unlocking the next billion users.
Arbitrum, Optimism, zkSync, and more — discover how Layer 2s scale Ethereum without breaking it, slashing gas fees and unlocking the next billion users.
SMooTH
Posted on Jun 7, 2025
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Ever had Google Maps suggest a different route because of highway traffic..
..but you decided you are smarter than Maps, took the main road anyway — and instantly regretted it?
That’s what using Ethereum without Layer 2s feels like.
You pay more, wait longer, and wonder why everyone else seems to be cruising past you for a fraction of the cost.
Ethereum is the backbone of Web3 — but it’s busy. And expensive.
That’s where Layer 2s come in.
They’re like express lanes for Ethereum: same destination, same security, just faster and cheaper.
In this guide, we’ll explore:
- What Layer 2s actually are, why they exist, and how they work
- Different types of L2s
- And what you can do on them right now
Let’s beat the traffic. 🛣️⚡
1️⃣ What are Layer 2s, and why do they exist?
Layer 2s (L2s) are blockchain networks built on top of Layer 1s (L1s) like Ethereum. They help scale the base chain by handling transactions off-chain (or semi-off-chain) and then submitting the results back to Ethereum for settlement.
Which - if you remember our previous lessons - is similar to the concept of transaction batching within blocks!
So why do these “extra lanes” exist?
Because Ethereum is a victim of its own success.
As we’ve learned, Ethereum is the go-to home for smart contracts, which in turn power DeFi, NFTs, DAOs and more.
But Ethereum can only handle about 15–30 transactions per second. That’s fine for early days. Not fine when millions of people show up using hundreds of dapps simultaneously.
Every time something popular launches — a hyped mint, a token airdrop, or a hot DeFi yield — the network gets flooded. Gas fees spike, transactions slow to a crawl, and users meme about $400 swaps.
So instead of rebuilding Ethereum from scratch, devs came up with a smarter plan:
Scale it with help.
Without Layer 2s, Ethereum can’t scale to mainstream use. With them, it just might become the foundation for the next generation of the internet.
Fun Fact
The Otherside NFT mint by Yuga Labs in April 2022 is remembered in Web3 as one of the most controversial mints in NFT history.
Yuga sold 55,000 virtual land NFTs for ~$317 million, but insane demand caused Ethereum gas fees to explode, with many people paying thousands of dollars in ETH just to process a transaction. 🤯
In total, the mint burned around 70,000 ETH in gas — roughly $157–$177 million at the time. For context, that’s 60% of the average ETH burned in an entire month in 2022, and more than a full month’s worth in 2025. All within a few hours.
Oh, and one more “fun” fact: today, a single Otherside NFT is worth 0.19 ETH, down ~90% from mint. 😵
2️⃣ How do Layer 2s actually work?
Now that we know why they exist, let’s look at how they do the job.
To scale Ethereum without breaking it, Layer 2s do one clever thing:
They take activity off the main chain, but still inherit its security.
Instead of every single transaction going through Ethereum’s overloaded base layer, Layer 2s batch up tons of activity — then post a summary (plus receipts) back to Ethereum.
But not all Layer 2s work the same. In fact, there are a few different flavors — each with their own way of getting the job done:
🔁 Rollups — the current MVPs
These are the most popular type of L2 in 2025. They “roll up” hundreds of transactions, compress them, and send a single update to Ethereum.
Two main types:
- Optimistic Rollups (e.g. Arbitrum, Optimism, Base) Assume transactions are valid unless challenged during a short window. Fast and simple.
- ZK Rollups (e.g. zkSync, Abstract, Scroll, Starknet) Use cryptographic proofs to instantly verify accuracy. More complex, but faster finality and lower risk.
🧪 Other types (less common, still useful)
- Validiums (e.g. Immutable X) Like ZK Rollups but store data off-chain for extreme scalability. Not as secure or decentralized, but cheaper and very fast.
- State Channels Enable participants to transact privately off-chain and only record the final result on-chain. Great for high-frequency stuff like gaming or micro-payments.
- Sidechains Independent blockchains that talk to Ethereum but have their own validators and security — like cousin networks with open DMs.
All of these submit compressed data back to Ethereum, meaning users enjoy fast speeds + cheap fees, while Ethereum still acts as the ultimate source of truth.
3️⃣ L2 vs L1
You might be thinking:
“Okay, but if Ethereum works… why not just upgrade Ethereum itself?”
Well, they are, but upgrading Ethereum itself is like renovating a skyscraper while people are still living inside. Layer 2s offer a quicker path to scaling — one that doesn’t disrupt the whole building.
Key distinctions:
- L1s are slow and expensive by design: it prioritizes decentralization and security above all, ensuring that anyone can verify the network. Anyone can run a node, and every transaction must be verified by thousands of nodes. That’s like running your emails through 10,000 reviewers before hitting send.
- L2s are faster but rely on L1s to finalize data
- L2s don’t have their own consensus — they inherit it from the L1
4️⃣ Use cases & examples
In 2025, Layer 2s are everywhere. They’re not just scaling infrastructure anymore — they’re entire ecosystems.
Speaking of ecosystems..
Did you know we keep dedicated ecosystem pages on the Pluid website? So far, we offer:
- Abstract (Layer 2 that focuses on building fun applications for consumers)
- Berachain (Layer 1 that focuses on building a liquidity-driven DeFi ecosystem)
- Monad (Layer 1 that focuses on raw speed and scalability for DeFi)
- HyperLiquid (Layer 1 that focuses on delivering a high-speed, on-chain trading experience)
While there are way too many L2s to cover them all in one article, let’s take a look at the top 5 before focusing on what application they power:
1️⃣ Mantle
Market Cap: ~$2.14B
Rollup Type: Optimistic (modular)
- Created in: 2023
- Main goal: Make Ethereum faster and cheaper by using a modular design — splitting up tasks like data storage and execution for better performance.
2️⃣ Polygon
Market Cap: ~$1.85B
Rollup Type: zkEVM + Sidechain
- Created in: 2017 (as Matic)
- Main goal: Help Ethereum scale by offering multiple solutions — from fast sidechains to secure zk rollups — so developers can choose what fits best.
3️⃣ Arbitrum
Market Cap: ~$1.63B
Rollup Type: Optimistic
- Created in: 2021
- Main goal: Let people use Ethereum apps with lower fees and faster speeds, without changing how the apps work.
4️⃣ Stacks
Market Cap: ~$1.08B
Chain Type: Bitcoin L2
- Created in: 2019
- Main goal: Bring smart contracts and apps to Bitcoin, turning it into more than just digital gold.
5️⃣ Optimism
Market Cap: ~$1.03B
Rollup Type: Optimistic
- Created in: 2021
- Main goal: Scale Ethereum with Optimistic Rollups — and create a shared base (OP Stack) for other L2s like Base to build on.
Now let’s look at what they’re being used for:
🧩 DeFi at scale
Cheaper fees and faster confirmations make L2s ideal for active trading, yield farming, and complex DeFi strategies — without getting wrecked by gas prices.
🎨 NFTs & Gaming (& gambling)
Cheap minting + fast transfers = win-win. Layer 2s have drastically reduced transaction costs to fractions of dollars.
👥 Social & Creator Apps
With L2s, microtransactions (like tipping, commenting, or gating content) become economically viable, opening doors for decentralized social media and creator tools.
🏛️ Governance & DAOs
L2s let DAOs run smoother. Voting is cheaper, faster, and easier — less friction means more participation.
🌍 Payments & Onboarding
Want to pay someone across the world in seconds? Without having to teach them everything about the blockchain before they understand how to withdraw the money? Yeah, L2s make that more feasible.
In short, L2s are to Ethereum what Pluid is to Web3 onboarding: streamlined, beginner-friendly, and built for scaling minds.
5️⃣ Conclusion
Layer 2s are Ethereum’s best shot at scaling without sacrificing the things that make it special: decentralization, security, and immutability.
They make transactions cheaper. They make dapps more usable. They bring Ethereum one step closer to onboarding the next billion users.
But don’t get it twisted — they’re not perfect.
- Bridges (which move assets between L1 and L2) are still a major attack vector.
- Not all L2s are equally decentralized — some rely on a multisig wallet or a centralized sequencer.
- User experience is still clunky. It’s not exactly normie-friendly — yet.
And god forbid you want to use different apps across different L2s.. suddenly you’re juggling networks, tokens, bridges, and learning the quirks of each ecosystem like it’s a full-time job.
Still, traffic is only getting heavier — and L2s are how Ethereum keeps moving.
Not just faster, but stronger, more scalable, and ready for tomorrow’s infrastructure.
Because this isn’t just about saving time — it’s about building a trustless financial layer for the world — no middlemen, no gatekeepers.
Just code.
So far, in our Blockchain 101 Series:
Author
SMooTH
@thisissmooth
🐍 Confident Cobra 📢 Communication is my passion 🔎 Research at Pluid 🦉 Ambassador at DYLI 👍
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