Layer 2 (L2) scaling solutions are protocols built on top of a base blockchain like Ethereum that move transaction execution off the congested main chain while still inheriting, to varying degrees, its security. They exist because a base layer's slow, globally-verified consensus caps throughput and drives up gas fees the moment demand spikes, and any team building beyond a toy dApp needs cheap, fast execution without giving up the trust guarantees users expect. The field spans a spectrum from rollups, which post enough data or proofs back to layer 1 to inherit its security almost fully, down to sidechains and payment channels that trade some of that security for speed and flexibility. The single most useful mental model here: every L2 design is a negotiation over how much data and computation stays on the expensive, secure base layer versus how much moves off it, and picking the wrong point on that spectrum for a given application is one of the most consequential architecture decisions a blockchain team makes.
What This Cheat Sheet Covers
This topic spans 14 focused tables and 106 indexed concepts. Below is a complete table-by-table outline of this topic, spanning foundational concepts through advanced details.
A jump-to index of every table row in this cheat sheet.
An interactive map of every table and concept in this topic.
Table 1: Scaling Fundamentals and the On-Chain vs Off-Chain Trade-off
Before comparing specific L2 designs, it helps to understand the base decision every scaling solution makes: how much work stays under the base chain's direct verification, and how much moves away from it.
| Approach | Example | Description |
|---|---|---|
A plain ETH transfer executed and verified by every Ethereum node | Every node re-executes every transaction, giving the strongest security and decentralization but capping throughput near L1's block gas limit. | |
Thousands of swaps batched off-chain, one compressed result posted to L1 | Moves computation away from the base chain, trading some trust or latency assumptions for far higher throughput and lower fees. | |
L1 = data + settlement layer; L2 rollups = execution layer | Ethereum's chosen scaling strategy since 2020 keeps the base layer focused on security and data availability, pushing execution to rollups. |