article

What does Layer-2 mean in crypto?

Nahid
Published: May 29, 2025
(Updated: May 30, 2025)
2 min read
What does Layer-2 mean in crypto?

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Layer-2 networks exist to fix a major problem in crypto: blockchains like Ethereum are powerful but slow and expensive under load. Layer 2s step in to help by taking the pressure off without requiring a full redesign of the base chain.

At its core, a Layer 2 is an extra processing layer that sits above the main blockchain. It executes transactions, handles computations, or settles interactions off-chain, and then pushes only the final result back to the base layer. That makes everything faster and cheaper while still inheriting the security of the underlying blockchain.

Why do Layer 2s exist?

Blockchains like Ethereum were not built for mass adoption out of the box. They handle every transaction one at a time, in order. That’s great for trust and decentralization, but it causes traffic jams when too many users pile on. Layer 2s aim to solve this. They offload work like payments, swaps, or even contract execution so that the base layer doesn’t have to do it all.

There are different types of Layer 2s, including:

  • Rollups: They batch transactions and publish proofs on Ethereum. This reduces fees and boosts speed
  • State Channels: Users lock funds in a contract and transact off-chain until they close the channel
  • Sidechains: Independent blockchains that communicate with the main chain, though often with different security models
  • Encrypted Layers: This is where COTI comes in, adding a privacy-focused execution layer that handles logic in encrypted form

In summary, Layer 2s let blockchains scale while keeping them secure. They aren’t replacements, they’re upgrades. 
Whether you're moving assets faster or keeping your code confidential, Layer 2s give developers more flexibility without changing the foundation.

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About the Author

Nahid

Nahid

Based in Bangladesh but far from boxed in, Nahid has been deep in the crypto trenches for over four years. While most around him were still figuring out Web2, he was already writing about Web3, decentralized protocols, and Layer 2s. At CotiNews, Nahid translates bleeding-edge blockchain innovation into stories anyone can understand — proving every day that geography doesn’t define genius.

Disclaimer

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official stance of CotiNews or the COTI ecosystem. All content published on CotiNews is for informational and educational purposes only and should not be construed as financial, investment, legal, or technological advice. CotiNews is an independent publication and is not affiliated with coti.io, coti.foundation or its team. While we strive for accuracy, we do not guarantee the completeness or reliability of the information presented. Readers are strongly encouraged to do their own research (DYOR) before making any decisions based on the content provided. For corrections, feedback, or content takedown requests, please reach out to us at

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