Blockchain Infrastructure

What is a Layer 2 (L2) in crypto?

A Layer 2, or L2, is a secondary network built on top of a base blockchain that processes transactions away from the main chain to reduce cost and congestion. It bundles many transactions together, executes them off-chain, and then records a compact summary back to the Layer 1, which keeps the underlying security guarantees. For example, hundreds of trades can be batched on an L2 and settled to Ethereum as a single proof, sharply lowering per-transaction fees. Understanding where an asset sits in this stack is part of how Qatobit's research-led indices are constructed.