Layer 1 vs Layer 2 refers to two types of blockchain architecture. Layer 1 is the base blockchain protocol, such as Ethereum or Bitcoin, that handles all transactions and network consensus directly. Layer 2 solutions are built on top of Layer 1 to improve scalability, speed, and cost-efficiency by processing transactions off-chain or in a more efficient manner. Examples of Layer 2 solutions include Lightning Network and Optimistic Rollups, which help reduce congestion and improve user experience.
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