# Layer 2

*Crypto & Digital Assets — Finicade finance glossary*

A layer 2 is a separate network that processes transactions off the main chain and posts proof back to it, inheriting its security at far lower fees.

A layer 2 is a separate network that processes transactions off the main chain and posts compressed proof back to it, inheriting the base chain's security while cutting fees by one to two orders of magnitude. It's the dominant scaling approach because it avoids weakening the base layer. The trade-offs are fragmented liquidity, bridging friction, and withdrawal delays on some designs.

**Also known as:** L2, layer two, scaling solution

**Related terms:** [Rollup](https://finicade.com/glossary/rollup), [Ethereum](https://finicade.com/glossary/ethereum), [Gas Fee](https://finicade.com/glossary/gas-fee), [Bridge](https://finicade.com/glossary/bridge), [Blockchain](https://finicade.com/glossary/blockchain)

Source: https://finicade.com/glossary/layer-2