LAYER 2

Layer 2 pertains to either a secondary framework or protocol or built on top of an already existing blockchain. These protocols aim at solving the transaction speed and scaling challenging that major cryptocurrency networks face. 

Bitcoin and Ethereum, for example, are still not able to process thousands of transactions per second (TPS). This, of course, hampers these digital assets from performing well or establishing long-term growth. Higher throughput is needed prior to effective adoption and wide-scale usage of these networks. 

Given these conditions, Layer 2 refers to the multiple solutions proposed to solve scalability issues that a blockchain encounters. The Bitcoin Lightning Network and the Ethereum Plasma are examples of Layer 2 solutions. These strive to provide increased throughput to blockchain systems despite particularities and varying working mechanisms.